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CA11: 25-Year-Old Takings Case Isn't Ripe

In 1996 (you remember 1996, don't you?), Corey purchased a vacant parcel, adjacent to a busy crossroads, and thus an ideal location for a truck stop. Problem was that the zoning was C-2, which didn't permit truck stops (although it did allow gas stations and convenience stores).

So began a 25+ year odyssey, which in Corey v. Rockdale County, No. 23-13097 (May 7, 2025), the U.S. Court of Appeals held that Corey's takings claim was not ripe because the County amended the challenged zoning ordinance around his earlier claim, and he had not received the County's confirmation under the most recent version of its zoning that the truck stop Corey had been trying to build was a definite no-go. 

Let's start at the beginning. To us, it seems like the takings claim was ripe back in 1999:

In 1999, Corey asked the County if its zoning regulations permitted him to build a truck stop on his property. The County said no and informed Corey that truck stops were not a “specifically designated” use for C-2 properties under the then-existing zoning ordinance.

Slip op. at 3.

But instead of suing (something few property owners want to do -- they want to use their properties, not pursue takings claims), the owner made efforts to try and make it work. He tried to amend the zoning (something he was not required to do). No luck. He asked to build a "travel plaza" and not a truck stop. County shook its head. He sued, unsuccessfully, to compel the County to issue a zoning permit. He changed his plans and instead of a truck stop, tried to build a C-store "which sold fuel to automobiles and heavy trucks." Slip op. at 4. Got nowhere.

By now, we're in 2006. The County re-emphasized its earlier "no truck stops" by amending the zoning ordinance to expressly say "no truck stops." Yes, you can have a gas station on C-2 zoned land (like Corey's adjacent properties), but you can't have any combination of uses that add up to "truck stop."

Flash forward to 2018. Corey sought to construct a "travel plaza." A C-store, gas pumps, truck scales, and truck parking. This time, things looked hopeful. The County planning director seemed amenable to an amendment to the C-2 zoning ordinance to allow travel plazas like this. The Planning Commission recommended adoption of this amendment to the County board of commissioners who have the final word on zoning amendments. "But the board unanimously rejected the amendment." Slip op. at 5.

Undaunted, Corey applied for a construction permit. Unsurprisingly, the County said no. This is a dang truck stop, dude!

In 2019, roughly a year after the amendment was rejected, Corey applied for a construction permit to build the QuikTrip travel plaza. The County rejected Corey’s permit application be-cause it sought to build a truck stop prohibited by the 2006 ordi-nance. Corey appealed the denial to the County’s internal appeals board, which—after holding a hearing—affirmed the County’s decision.

Id.

He appealed the decision up through the state court system, ultimately winning a claim that the ordinance's definition of "truck stop" was unconstitutionally vague. Slip op. at 6.

What's that old saying? If at first you don't succeed, try try again? This time it was the County's turn.

Remember that infamous advice back in the day where government were advised that if they got whacked with a regulatory takings judgment that all they needed to do was amend the regulation and require the owner to start over? The County's approach here seems like a ripeness version of that advice. In 2021, it amended the C-2 zoning to clarify the definition of truck stop, and re-emphasize that such uses are prohibited.

"Fool me three times, shame on me" thought Corey: he sued for a taking. But the district court entered judgment on the pleadings for the County.

The Eleventh Circuit affirmed the dismissal. Despite the earlier denials of permit applications, and the current version of the ordinance expressly prohibiting truck stops, Corey's claim that being prohibited from building a truck stop is a taking isn't ripe. Why? Because "Corey did not apply for a permit or variance under the 2021 ordinance." Slip op. at 10. You never know: the County this time might say yes (despite decades of saying no in nearly every way possible).

Wouldn't this be futile in light of this history, as Corey argued? No, those earlier denials were under the then-applicable C-2 zoning ordinances. But there's been no application -- and thus no denial -- under the current zoning ordinance. Hang on. Isn't the 2021 zoning ordinance more restrictive and more clear that truck stops are banned? Yes, but the County is entitled to have a chance to apply the 2021 ordinance. To say what, exactly? That it would allow a truck stop when it clarified the ordinance to expressly prohibit truck stops?

And what about the where's-there's-smoke vibe that this ordinance was amended to thwart Corey's use of his property, and not as some general prohibition on truck stops? No, the Eleventh Circuit held, this ordinance didn't target "precisely and only" Corey and his parcel. The truck stop ban applied to all C-2 properties in the County. We wonder how many of those other properties were suitable for truck stops. Hmmm.

All Corey needs to do to ripen a takings claim is to apply for a C-2 zoning permit, and if that doesn't work, to seek a "variance" (even though you land users know that what courts identify as a "variance" isn't even in the ballpark about what variances are about -- what courts mean is some kind of decision by the County to not apply the C-2 zoning and allow a truck stop despite the ordinance's express prohibition). 

This case is a good illustration of the tail wagging the dog nature of final decision ripeness. And dntil the Supreme Court wakes up and pays attention to what is going on, nothing is going to change.

Corey v. Rockdale County, No. 23-13097 (11th Cir. May 7, 2025) (unpub.)

CA2: The Harm In Home Equity Theft Takings Is Government's Retention Of Surplus Equity

A brief, but important, decision from the U.S. Court of Appeals for the Second Circuit.

In Sikorsky v. City of Newbergh, No. 23-1171 (May 2, 2025), the court held that the plaintiff adequately pleaded a regulatory takings claim which was based on Tyler v. Hennepin County, where the U.S. Supreme Court held that a government violates the Fifth Amendment if it seizes and liquidates property in order to satisfy the owner's tax debt, but "keeps the change" and retains any proceeds in excess of the tax debt.

Here, Sikorsky purchased a home but failed to pay $92,786 in taxes, and the city eventually foreclosed. The city sold the home for $250,000 more than Sikorsky owed in taxes, "but refuses to give him the surplus." Slip op. at 3. He sued, and the district court dismissed:

Two months after Tyler was decided—and seemingly without reference to it—the District Court granted the defendants’ motion to dismiss. Sikorsky, pro se, timely appealed from the judgment. While Sikorsky’s appeal was pending, and in response to Tyler, New York enacted laws that provide procedures for certain claimants to recoup surplus equity from foreclosure sales. N.Y. Real Prop. Tax Law § 1197(1); 2024 N.Y. Sess. Laws ch. 55, pt. BB § 19(1)(a), (c).

Slip op. at 5-6.

The court concluded that the post-Tyler statute did not provide Sikorsky a procedure by which to claim the surplus (and thus avoid the taking) because it only applied to cases where the home was sold after the date the Supreme Court issued the Tyler opinion (May 25, 2024). Here, the home was sold before that date.

The court also held that the complaint stated a takings claim and rejected the city's res judicata argument that two earlier suits precluded Sikorsky from asserting a takings claim now. This claim, the court held, was not ripe at the time of the earlier cases because the city had not yet wrongfully kept the surplus. Thus, his takings claim only accrued and ripened, when the city withheld the surplus:

The “general rule” is “that claims are ripe once a cause of action accrues.” Somoza v. N.Y. City Dep’t of Educ., 538 F.3d 106, 115 (2d Cir. 2008). A “claim accrues when the plaintiff knows or has reason to know of the harm.” Eagleston v. Guido, 41 F.3d 865, 871 (2d Cir. 1994) (quotation marks omitted).

This Court has yet to consider when a claim for surplus equity under Tyler accrues. We hold that the “harm” at issue is the municipality’s retention of surplus equity. As the Tyler court explained, “‘[t]o withhold the surplus from the owner would be to violate the Fifth Amendment.’” Tyler, 598 U.S. at 643 (quoting United States v. Lawton, 110 U.S. 146, 150 (1884))). In this case, that harm did not occur until the City received (and began to “retain”) the money from the sale of the property, which Sikorsky alleges occurred in June 2021. Sikorsky commenced his first state court action against the City in 2017 and his second in March 2021. Thus, both of Sikorsky’s state court actions began before his claim was ripe. Claim preclusion does not bar a claim that could not have been brought in the earlier action, so it does not bar Sikorsky’s claim here.

Slip op. at 11-12 (footnote omitted).

Dismissal vacated, case returned to the district court for adjudication on the merits.

Check it out.

Sikorsky v. City of Newburgh, No. 23-1171 (2d Cir. May 2, 2025)

SCOTUS Hat Trick? Houseboat Guy Returns For Shot At Lucas Ripeness

Here's the latest in a case we've been following.

This is Fane Lozman. You know his name. Yes, the guy who has taken on the City of Riviera Beach, Florida twice at the Supreme Court, and is now coming back for a third shot on goal. Houseboat guy. Public hearing gadfly guy. And now, maybe the ripeness guy.

Lozman has filed a cert petition asking the Court to review the Eleventh Circuit's opinion which dismissed his regulatory takings claim as unripe.

Here's the Questions Presented:

Fane Lozman has a contentious relationship with the City of Riviera Beach, Florida. The City’s mistreatment of Mr. Lozman has twice required this Court’s intervention. See Lozman v. City of Riviera Beach, 568 U.S. 115 (2013); Lozman v. City of Riviera Beach, 585 U.S. 87 (2018).

In this third chapter, Mr. Lozman was forced to sue the City because its land-use restrictions have de prived his waterfront property of all economically ben eficial use, causing a taking under Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). The controlling City ordinance is clear: He can use this property for “[p]rivate residential fishing or viewing plat- forms” and small “docks for non-motorized boats,” and nothing else. Yet the Eleventh Circuit held Mr. Lozman’s Lucas claim unripe. In the court’s view, because these scant private uses are permissible, Mr. Lozman must apply to the City for a “final decision” on how he can use his property.

The questions presented are:

1. Whether a claim that a local ordinance effected a regulatory taking upon enactment remains unripe until the landowner asks the local government for permission to develop his property in ways the ordinance plainly prohibits.

2. Whether a regulation that forbids any economically beneficial use causes a taking under Lucas, regardless of the property’s residual value

The petition has garnered a ton of amicus support.

The cert-stage briefing isn't quite done yet, with (presumably) Lozman's reply on the way. Then we see where this one goes.

Stay tuned.

CA6: Property Owner Needs To Exhaust State Remedies Before Filing Takings Claim

Check out the U.S. Court of Appeals for the Sixth Circuit's opinion in Howard v. Macomb County, No. 24-1655 (Mar. 28, 2025).

This is one of those post-Tyler cases asking whether the government satisfies the Fifth Amendment after it has taken someone's home equity by satisfying the owner's tax debt and then keeping the excess. Hold on, didn't the unanimous Supreme Court in Tyler say no, that violates the Takings Clause?

Well yes. You remember the "render unto Caesar" thing, and the "bank robber giving back the money" thing. So there's a taking without compensation -- and thus a violation of the Takings Clause -- the moment the government keeps what it is not supposed to keep. But Tyler also referred to an earlier case, Nelson v. City of New York, 352 U.S. 103 (1956), which has been read to get the government off the hook if it has made available a way for the owner to get their property back. 

In Howard, the Sixth Circuit held that because Michigan has adopted a statute whereby owners whose equity has been taken may get that money back, there's no claim for a taking as a matter of law. That's good enough to avoid the violation of the Constitution. It doesn't matter whether the post-taking procedure is clear enough that owners can navigate it, or whether they do. It's there, owners, and it's up to you to go get your money back. 

The Howard opinion doesn't use the word "exhaustion." Nor does it mention administrative remedies. So how can we write in this post's headline that the Sixth Circuit has required home equity theft takings plaintiffs to exhaust administrative remedies, and that they do not have a claim under the Takings Clause until they seek statutory relief, and are denied? In our view, that is exactly what the Sixth Circuit is requiring.

But didn't Knick v. Township of Scott, 588 U.S. 180 (2019) conclude that the cases which seem to say that the availability of post-taking compensation is "too broad" a reading, and that "[s]imply because the property owner was not entitled to injunctive relief at the time of the taking does not mean there was no violation of the Takings Clause at that time[?]" That's how we read Knick, as does the Tenth Circuit in this recent case. 

The Sixth Circuit tried to distinguish Knick by concluding there's no taking if the state makes available a post-taking remedy:

Howard resists this conclusion, first by contending that precedent allows her to recover directly from the county under the Takings Clause as opposed to collecting it under the Michigan law. Under Knick v. Township of Scott, 588 U.S. 180 (2019), as Howard reads it, she has no obligation to satisfy the requirements of the Michigan procedure. Knick, it is true, held that, when a State takes a citizen’s property, she may file a claim for just compensation under 42 U.S.C. § 1983 without exhausting her right to seek compensation under state law. Id. at 191. But unlike the state laws at issue in Knick, Michigan’s procedures for collecting the surplus do not compensate the property owner for a taking. They prevent a taking from happening in the first place. A county that allows property owners to obtain any surplus after a foreclosure and keeps the residual only if the owners do not seek it does not commit a taking. See Nelson, 352 U.S. at 110; see also Tyler, 598 U.S. at 644. Had Howard followed the Act’s procedures for claiming the surplus, only to be denied it, then she could immediately bring a takings claim under § 1983. That is all that Knick guarantees.

Howard separately claims that Knick cut back on Nelson. But, as shown, the two cases address distinct issues. Nelson addressed whether state action caused a taking. Knick addressed the available remedies after a taking occurs. That explains why Knick never mentions Nelson. And it explains why Tyler relied on Nelson in explaining how to determine the existence of a taking. See Tyler, 598 U.S. at 643–45.

Slip op. at 8.

We thought property owners could advance directly to "Go" and bring a federal compensation claim under section 1983 after Knick? That they didn't have to chase state law procedures for obtaining compensation. Or was that only for when there's a judicially-recognized remedy to obtain just compensation, as in Williamson County? Does it make a difference that here, the post-taking compensation state law remedy is statutory? No difference we can discern.

Williamson County is apparently alive and well in the Sixth Circuit. Stay tuned.

Howard v. Macomb County, No. 24-1655 (6th Cir. Mar. 28, 2025)

CA10: Takings Clause Means Never Having To Administratively Ask To Get Your Property Back

Check out the U.S. Court of Appeals for the Tenth Circuit's recent opinion in Knellinger v. Young, No. 23-1018 (Apr. 11, 2025). 

It's worth reading because the court doesn't fall into the common trap of concluding that although an owner need not exhaust administrative remedies before asserting a takings claim, he nonetheless doesn't have "private property" because ... he hasn't exhausted administrative remedies to get his property returned. As the court summed it up:

[The owners] ... argu[e] that they alleged facts sufficient to state a claim that Colorado took their property for public use without just compensation. We agree. Property owners who plausibly allege that Colorado has taken custody of their property under RUUPA, and used it for public purposes, need not file administrative claims with Colorado before they may sue for just compensation. The moment a state takes private property for public use without just compensation, a property owner has an actionable claim under the Takings Clause.

Slip op. at 2.

This is a challenge to Colorado's version of the Uniform Unclaimed Property Act. That's the statute by which the government presumes that "certain property has been abandoned after a period of time defined by statute." Slip op. at 3. Once property is abandoned, whoever holds the property reports and delivers it to the government. The state Treasurer holds the property for the benefit of the owner, and the owner may recover the property by filing an administrative claim, and if that is unsatisfactory, may sue in a Colorado court. 

The Treasurer must take steps to notify the owner by email (how modern) if the Treasurer has the owner's address. But if none, all that is required is posting on the state's unclaimed property website (check it out, maybe you could be a class member).

The plaintiffs here checked the website and noted that Colorado was holding what are fairly small amounts of money (less than $250). Next stop, federal court:

Knellinger and Storey did not file administrative claims, nor did they file a suit in Denver County Court as authorized by RUUPA. Instead, Plaintiffs sued in federal district court. As relevant here, Knellinger and Storey brought a claim under 42 U.S.C. § 1983, alleging that Colorado’s unclaimed property scheme violated the Takings Clause of the Fifth Amendment, as applied to the States through the Fourteenth Amendment. They filed suit against the officials in charge of administering RUUPA: David Young (the Colorado State Treasurer) and Bianca Gardelli (the Director of the Unclaimed Property Division of the Treasury) in their individual and official capacities (collectively, “Defendants”). Knellinger and Storey alleged that Defendants had “taken control of and liquidated” their property and “converted [it] to public use” without “just compensation.” App’x at 34. They sought a monetary remedy of “restitution of the proper value of their property . . . according to the applicable principles of law for reimbursement purposes”—that is, “just compensation.” Id. at 34–35. They also sought to enjoin Defendants from violating the Takings Clause in the future.

Slip op. at 5-6. The complaint also alleged that instead of keeping these funds for the benefits of the owners and segregating the monies, the state put some of the funds to public uses (funding the Colorado State Fair, surely a public use), and commingled some of the funds with the state's general fund. 

The district court dismissed for lack of standing. It concluded that the plaintiffs lack standing because they do not own "private property."

Hang on...didn't the state's website say that the Treasurer was holding on to the plaintiffs' property? Yes, but the plaintiffs had not filed an administrative claim to the money, which is necessary in order to establish their ownership. Slip op. at 7. No private property, means no injury, means no jurisdiction.

The Tenth Circuit reversed. It first noted that the jurisdictional facts are "intertwined with the merits of the case[.]" Slip op. at 9. Here, "the merits question and the jurisdictional question entirely overlap[.]" Slip op. at 10. Thus, the court opted to treat the 12(b)(1) motion as a 12(b)(6) motion to dismiss for failure to state a claim.

On that, the complaint pleaded a plausible takings claim. Write this down:

In short, to make out a Takings Clause claim, a plaintiff must plead that: (1) something was “taken” by the government; (2) it was “property”; (3) it was the plaintiff’s property; and (4) it was taken “for public use, without just compensation.” Plaintiffs pleaded facts sufficient to make plausible each of these elements. Therefore, they sufficiently stated a Takings Clause claim.

Slip op. at 13.

We advise writing this down even though the court's approach should be obvious (it tracks the text of the Fifth Amendment) because many courts don't get this. You have to plead one of the takings theories (e.g., Lucas, Penn Central) in detail to state a takings claim, not just the elements above. We also are keeping this one because it recognizes that the state cannot 100% define or put major limits on the term "private property" (the essential holding of Tyler v. Hennepin County, 598 U.S. 631 (2023)). 

The Tenth Circuit rejected the district court's backdoor exhaustion requirement (the plaintiffs don't have property until Colorado's admin process confirms they have property).

Second, the district court imposed a de facto requirement that a plaintiff must file an administrative claim with Colorado prior to proceeding in federal court. See id. However, under Knick, it is clear that a property owner has no obligation to seek a remedy through state administrative proceedings or through litigation in state court. 588 U.S. at 185. A property owner’s “right to full compensation” is not contingent on “post-taking remedies that may be available.” Id. at 190. Rather, that right vests “when the government takes his property without just compensation.” Id. at 185. That is true even if an administrative proceeding—or state court discovery—could yield additional facts helpful to a federal Takings Clause suit

Slip op. at 15. (footnote omitted).

Not so, held the Tenth Circuit. All reasonable inferences cut in the plaintiffs' favor, and it is reasonable to infer that the names on the website refer to the plaintiffs. Same with the lack of a claim of value: "[n]or is it necessary for Plaintiffs to plead the precise value of the property taken in order to avoid a motion to dismiss. That is a question of precise damages for a much later stage." Slip op. at 16.

We think the Tenth Circuit got it very very right here. The pleadings are not the place to resolve what essentially are factual disputes. Plausibility and Twiqbal and all that, but we still operate under Rule 8's notice pleading standards, and takings plaintiffs do not have to plead their claims or the facts supporting them with particularity. Nor are they reliant on the very process they are challenging to define their "private property" interests.

One remedy note: the Tenth Circuit affirmed the dismissal of the prospective injunctive relief sought because "[i]n this instance, § 1983 provides an adequate basis for [plaintiffs] to obtain just compensation for a taking." Slip op. at 17.

Finally, the court noted an important point:

Of course, if Colorado wishes to avoid defending against § 1983 suits for unclaimed property, it may always decide voluntarily to revise its laws or practices with respect to unclaimed property. For instance, Colorado may implement administrative procedures designed to make just compensation more convenient or timely compared to inverse-condemnation litigation. But the Fifth Amendment describes a right to just compensation, not a right to particular procedures to secure such compensation, so Knellinger and Storey have no ability to force Colorado to compensate property owners through their procedure of choice. In other words, it is the role of our Court to ensure just compensation, not to rewrite a state’s procedures for obtaining it.

Slip op. at 17.

Knellinger v. Young, No. 23-1018 (10th Cir. Apr. 11, 2025)

CAFED: Sleeping With The Fishes - Requiring Water To Stay In River Is A Regulatory, Not Physical, Taking

Here's the U.S. Court of Appeals for the Federal Circuit's opinion in United Water Conservation District v. United States, No. 23-1602 (Apr. 2, 2025), which gets a bit metaphysical.

The District is responsible for a dam and canal that diverts water from the Santa Clara River in southern California. Under the authority of the Endangered Species Act, the NOAA required the District to leave more water in the river for steelhead trout habitat. Either that, or seek an incidental take permit allowing the District to "take" (i.e., kill) steelhead.

The District asserted this is a physical taking of its water rights, but the government said no, this is a regulatory taking. Why is this important? Because a physical takings claim is ripe right now, without any need to exhaust any avenues for administrative relief from the NOAA, But if this is a regulatory takings claim, it isn't ready for judicial review until the NOAA has provided a final decision in the form of a yes or no on an incidental take permit. Which it has not done because the District hasn't applied for an incidental take permit. The Court of Federal Claims agreed with the government, and the District appealed. 

The Federal Circuit saw the difference between physical and regulatory takings thusly:

Regulatory takings differ from physical takings in that, instead of asking “whether the government has physically taken property for itself or someone else—by whatever means,” the question is whether the government “has instead restricted a property owner's ability to use his own property.” Id. (citing Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Plan. Agency, 535 U.S. 302, 321–23 (2002)). “While there is no ‘set formula’ for evaluating regulatory takings claims, courts typically consider whether the restriction has risen to the level of a compensable taking under the multi-factor balancing test articulated in Penn Central, 438 U.S. at 124.” Casitas I, 543 F.3d at 1289; see Tahoe-Sierra, 535 U.S. at 322 n.17 (“When, however, the owner contends a taking has occurred because a law or regulation imposes restrictions so severe that they are tantamount to a condemnation or appropriation, the predicate of a taking is not self-evident, and the analysis is more complex.”).

Slip op. at 7.

The Federal Circuit concluded that the District has a property right in the use of water it diverts. But it rejected the District's argument that NOAA's order to not divert as much water as it had been diverting and instead leave it in the river is the same as the government seizing the water. Not so, held the court. This is merely a restriction on the District's use.

But what about that earlier case in which the Federal Circuit held that the government requiring another water rights owner to put water into a fish ladder was a physical taking?  See Casitas Municipal Water Dist. v. United States, 543 F.3d 1276 (Fed. Cir. (2008). Nope. The difference is that in Casitas, the water district already had diverted the water from the river into its own system and the government ordered it to redirect the already-appropriated water to the fish ladder. Whereas here, the water district was merely ordered to not divert it and leave it in the river for the fish.

The Federal Circuit also distinguished a a Supreme Court case which held that the government's stopping the water flow to the plaintiff's mill was a physical appropriation. By contrast, here, the government had not "completely cut off [the District's] access to the water or cause it to return any volume of water it had previously diverted to its possession[.]" Slip op. at 10. "In fact, [the District] alleges that [NOAA], at most, required more water to stay in the Santa Clara River." Id.

The District argued the court shouldn't view this so hyper-technically: we had the right to X amount of water before, and due to the government's restrictions has X-minus amount now. We think that makes a lot of sense. 

But let's put that aside for the moment and get to what we see as the more fundamental issue. Should there be a difference between a physical claim and a regulatory claim such that they should be subject to different ripeness requirements?

The idea that there's a meaningful (or as the Federal Circuit says, "material") difference between a physical takings theory and a regulatory takings theory is difficult for us to wrap our mind around. There's but a single cause of action to describe the situation where an owner claims some action by the government has the same effect on property as would an exercise of eminent domain (aka inverse condemnation, regulatory taking, de facto taking). See Yee v. City of Escondido, 503 U.S. 519, 534-35 (1992) (“Petitioners’ arguments that the ordinance constitutes a taking in two different ways, by physical occupation and by regulation, are not separate claims. They are, rather, separate arguments in support of a single claim—that the ordinance effects an unconstitutional taking.”). Reminds us of that perhaps-apocryphal story about LBJ getting into the "wrong" helicopter. They're all de facto takings, son. After all, in eminent domain the taking of a nonpossessory easement is treated exactly the same way as a taking of the fee simple interest.

Nonetheless, the Federal Circuit thinks there's a big difference. But what's the difference between having a right to divert water, and a right to water already diverted? We can't see a whole lot. But here's the court's thinking:

The Supreme Court precedent that United relies upon, however, does not acknowledge any distinction between physical and regulatory takings. That is presumably because it was not until 1978, decades after the decisions in International Paper, Gerlach, and Dugan, that the Court, in Penn Central, “clarified [ ] the test for how far was ‘too far’” for a regulation to be recognized as a taking. Horne v. Dep’t of Agric., 576 U.S. 350, 360 (2015). It may also be because the alleged takings in those cases did not arise from a regulation, as it clearly does here under the ESA. Moreover, Gerlach and Dugan involve riparian water rights, not appropriative water rights as here. The difference between the two is meaningful in the context of this case because riparian rights exist by virtue of land ownership and, therefore, their acquisition by the landowner does not depend on any physical acts of diversion and beneficial use of water as is required for appropriative water rights. See Colorado, 459 U.S. at 179, n.4 (“Appropriative rights do not depend on land ownership and are acquired and maintained by actual use. Riparian rights, in contrast, originate from land ownership and remain vested even if unexercised.”). Unlike the riparian-rights holders in Gerlach and Dugan, therefore, the appropriative-rights holder here needed to have physically diverted water for its property right to vest and thus become subject to a physical taking, as in Casitas. For at least those reasons, the Supreme Court precedent and related cases United cites are consistent with our decision here.

Slip op. at 12.

United Water Conservation Dist. v. United States, No. 23-1602 (Fed. Cir. Apr. 2, 2025)

Breaking: Texas Takings Law Enters The 20th Century!

Here's the latest in a case we've been following closely (and disclosure: our firm filed an amicus brief in the Texas Supreme Court).

First, the bottom line: in The Commons at Lake Houston, Ltd. v. City of Houston, No. 23-0474 (Mar. 21, 2025), the Texas Supreme Court held that merely because a regulation is a justified exercise of police power does not insulate it from a claim that it goes too far and is also a taking requiring compensation. 

The Texas Court of Appeals held that the city could not be liable for a taking for an ordinance that limited development and use within the city's 100-and-500-year floodplains because the ordinance was a valid exercise of police power and otherwise survived the rational basis test.

As we wrote here, that seems like utter nonsense to say that a valid police power reason categorically insulates a government action from a takings challenge. After all, the entire regulatory takings doctrine is built on the notion that an otherwise-valid exercise of government power (here, the police power, delegated from the State to the city) can so impact an owner's property rights that the law will treat it as a de facto exercise of eminent domain, and require just compensation. The doctrine pretty much presumes that the governmental action is valid, and challenges to what are claimed to be invalid government actions fall under the due process label.

The reason for our snarky headline is that we thought this issue was settled in the "original" regulatory takings case in the early 20th Century, Pennsylvania Coal Co. v. Mahon. Way back in 1922, the Supreme Court held 8-1 that if regulation "goes too far" into an owner's rights, it is a taking. And this was despite the fact that there, it seemed like Pennsylvania's police power justifications for the Kohler Act were very police powery. Preventing surface subsidence seems pretty solidly health, safety, and welfare justified. The Mahon majority rejected the arguments of the City of Scranton and Justice Brandeis' solo dissent that the doubleplusgood police power reasons were enough to say no taking. 

Well, for whatever reason, Texas had not entirely caught the vibe. Or at least there was some lingering uncertainty about the century-plus reasoning that takings doesn't turn on the government's reasons, but focuses on the effects of what might be valid regulations have on the property owner. You know, the Armstrong thing: is it fair to put the entire burden of a public good on a property owner. The same question we ask in straight eminent domain. 

So we are grateful to our friend and colleague Charles McFarland for representing the property owner. Check out the oral arguments here. 

We urge you to check out the opinion. Well worth reading. Here's what we think is the money quote:

But we have long rejected “the notion that the government’s duty to pay for taking property rights is excused by labeling the taking as an exercise of police powers.” Steele, 603 S.W.2d at 789.38 Indeed, whether a regulation constitutes a valid exercise of the police power—or promotes any other important public policy, purpose, or interest—is simply irrelevant to whether the regulation causes a compensable taking. Lingle, 544 U.S. at 543.39 If a regulation does not promote a valid public purpose, the taking is simply impermissible because it is not a taking for a “public use,” and “[n]o amount of compensation can authorize such action.” Id. So whether a regulation constitutes a valid exercise of the police power “is a separate question” than whether it results in a compensable taking. Loretto, 458 U.S. at 425. We do not even attempt to “compartmentalize” a government regulation as being either a taking or an exercise of the police power because of “the manifest illusoriness of the distinctions” between the two. DuPuy, 396 S.W.2d at 107.41 Simply put, any attempt to create a dichotomy between takings and police-power regulations “has not proved helpful in determining when private citizens affected by governmental actions must be compensated.”

Slip op. at 14 (footnote and some citations omitted).

The court also held that the takings claim is ripe under Pakdel's "relatively modest" requirement for a final decision because, despite a number of applications that went nowhere (but haven't been out-and-out denied), the city has said that the owner "has not right to obtain the permit." See slip op. at 25-27.

The opinion's reasoning on this issue is instructive, and well-worth keeping in your hip pocket, because it accurately captures what owners often face when dealing with a regulatory scheme, a topic we've thought about a lot:

Perhaps if the City had ever told The Commons that it was requesting the wrong permit or applying in the wrong manner, the City could have an argument that it was never given the opportunity to grant or deny The Commons relief. See Mayhew, 964 S.W.2d at 929. What the City has instead is a paper trail down which it dragged The Commons for months, if not years, with no suggestion of compromise or a final determination. See Palazzolo, 533 U.S. at 620 (“[A] landowner may not establish a taking before a land-use authority has the opportunity, using its own reasonable procedures, to decide and explain the reach of a challenged regulation.” (emphasis added)). Nevertheless, the City’s assertions that The Commons simply has “no right” to obtain a floodplain-development permit and that its claim “cannot ever ripen” clearly indicates absolute finality. Although the City has not yet formally denied a permit, it “may not burden property by imposition of repetitive or unfair land-use procedures in order to avoid a final decision.” Id. Under these facts, we conclude that The Commons’s inverse-condemnation claim is ripe for adjudication.

Slip op. at 27.

Good work, Charles, thank you.

The Commons of Lake Houston, Ltd. v. City of Houston, No. 23-0474 (Tex. Mar. 21, 2025)

Ind App: Eminent Domain Abuse Is [Also] Abuse Of Process

What does a property owner do if she believes that the government's eminent domain lawsuit is abusive? Is the remedy limited to the four corners of the eminent action (i.e., a counterclaim, third-party claim, etc.), or may a landowner institute a separate action which includes a tort claim for abuse of process? 

In Indiana Land Trust #3083 v. Hammond Redevelopment Comm'n, No. 24A-PL-1284 (Jan. 31, 2025), the Indiana Court of Appeals held that because the remedies in an eminent domain case and an abuse of process case are different, the owner may press claims that the "taking was for 'discriminatory private purposes, for private gain, motivated by spite and/or that it is against public purposes[.]'" in a separate abuse of process lawsuit. Slip op. at 5. 

Here's the order of events:

• Redevelopment agency instituted an eminent domain case in state court to take owner's property as part of a redevelopment project.
• In that case, owner counterclaimed and instituted a third-party complaint which included allegations that the taking was abusive.
• The redevelopment agency objected to the third-party complaint on the grounds that "Indiana’s Eminent Domain Act does not permit any pleadings in eminent domain actions outside of the complaint, objections, and written exceptions." Slip op. at 3.
• At some time in this process, the owner filed a separate state court lawsuit against the condemnor, alleging pretty much the same thing as the counterclaim and third-party complaint. The condemnor removed the case to federal court.
• The state trial court dismissed the owner's third-party claim, on the basis that the owner could press these claims in the now-federal lawsuit. 
• But the federal court dismissed the owner's complaint, and the Seventh Circuit affirmed holding, "'[t]he eminent domain action is playing out in Indiana state court[.]'" Slip op. at 5.
• Next, the owner filed another state-court action for, inter alia, abuse of process.
• Redevelopment agency sought dismissal on the grounds that the allegations of abuse of process (which included allegations of a private benefit taking and related) could only be raised in the pending eminent domain action, and the trial court agreed.

The court of appeals reversed. It focused on the nature of an eminent domain action, and the tort of abuse of process, zeroing in on the remedies available in each case. 

Based upon their complaint, Landowners essentially alleged that the eminent domain action was substantively improper, they raised questions of fraud and bad faith, and they alleged that the proceeding was a subterfuge to convey the Property for a private use. Given the procedural posture of this case and the expansive definition of process that includes both procedural and substantive elements and mindful that we view the pleadings in the light most favorable to Landowners and construe every reasonable inference in their favor, we conclude that Landowners raised a question that is a proper subject for judicial review and sufficiently alleged a claim for abuse of process. The trial court erred in granting Defendants’ motion to dismiss.

Slip op. at 22.

It looks like a lot turned on "[g]iven the procedural posture of this case," and the trial court's earlier rejection of the owner's attempt to raise similar issues in the condemnation lawsuit. Nonetheless, we think there's a lot there worth understanding, with the bottom line being, yes, you can (and perhaps should) raise these type of objections in a separate claim or suit. 

Indiana Land Trust #3082 v. Hammond Redevelopment Comm'n, No. 24A-PL-1284 (Ind. Ct. App. Jan. 31,

When The Substitute Teacher Gives You Homework: Justice Breyer Says Federal Court Needs State Court Decision Before Considering Takings Claim

You remember when in grade school you learned that your teacher was out for the day, and you were getting a substitute? It could be a very good day, or a very not-so-good day. Maybe the sub was cool, and you end up watching filmstrips. But if you drew the short straw, the sub acted like a real teacher and did real teacher stuff like give you homework.

That's what it must've felt like when the advocates showed up for arguments in the First Circuit as it considered 29 Greenwood, LLC v. City of Newton, No. 24-1518 (Feb. 4, 2025), and there on the bench was none other than Justice (ret.) Breyer, sitting by designation. Was it going to be filmstrips, or homework?

The case was an appeal of the district court's rejection of a federal takings claim on the grounds that "this case amounts to an everyday zoning-type dispute between a zoning board and a property owner -- the type of dispute that is not sufficiently unusual to trigger the Takings Clause." Slip op. at 5.

The short story is that a property owner which was restoring a historic home discovered during the course of the work that it was in worse shape than thought. It had a construction permit from the city's Historical Commission, so went ahead and "tore down large portions of the building[.]" But when the Commission found out, it concluded that this work went beyond the scope of the construction permit. It issued a stop work order and initiated a criminal complaint. "Although state law provided a mechanism to challenge the Commission's determination that it had violated its permit, Greenwood did not invoke that method." Slip op. at 4.

After trying to satisfy the Commission that this work was ok and obtain a reconstruction permit (all such efforts were rebuffed), "Greenwood began to think that the Commission would never authorize it to rebuild the house." Id. Next stop: state court for a takings lawsuit.

The case didn't stay there, because the city removed to federal court. After which the other shoe dropped and the city moved to dismiss for failure to state a claim. Thus, "[t]he primary question raised in this suit is whether the Commission violated the Takings Clause by failing to grant Greenwood the reconstruction permit it seeks." Slip op. at 5.

But instead of considering that issue, the First Circuit, in an opinion authored by Justice Breyer, held that the case doesn't even belong in federal or state court at all, deciding to abstain to let other, pending state court actions narrow or moot the issues first.

Homework, not filmstrips!

Before filing the takings claim in state court, the owner had challenged the Commission's rejection of its reconstruction permit (apparently under the state APA). That case remains active in state court. There was also that pending criminal complaint in state court. Either of those, wrote Justice Breyer, might moot the federal takings claim, or otherwise make it go away. At worst, allowing these state court actions to play out might narrow the federal issues.

In short, Pullman abstention, which is especially needed because land use is "local" social policy:

This is particularly true when a constitutional question implicates issues of land-use planning -- a "sensitive area of social policy into which the federal courts should not lightly intrude." Columbia Basin Apartment Ass'n v. City of Pasco, 268 F.3d 791, 802 (9th Cir. 2001) (quoting Pearl Inv. Co. v. City & Cnty. of S.F., 774 F.2d 1460, 1463 (9th Cir. 1985)).

Given the overlapping legal issues between the pending state-court case (concerning state law, not federal constitutional law) and the case here (concerning a federal constitutional issue), the best course is for the state court to analyze this dispute before the federal courts weigh in further. The outcome of Greenwood's state court case could moot -- or significantly narrow -- this case. If Greenwood loses its case in state court, that means the Commission acted reasonably under state law, suggesting that this is the sort of ordinary zoning dispute not likely to trigger the Takings Clause. And if Greenwood prevails, it should be able to obtain there a significant portion of the relief it seeks here. Greenwood's other claims could be mooted or narrowed by the state-court proceeding, too. Whether the fines, not yet issued in the state criminal action, would be constitutionally excessive turns at least in part on the legality of the Commission's actions under state law. And the state-law claims that Greenwood has raised here are largely derivative of its federal Takings claim. We recognize that the Commission has not requested abstention here, but we "may raise the issue of abstention sua sponte." Ford Motor Co. v. Meredith Motor Co., 257 F.3d 67, 71 n.3 (1st Cir. 2001).

Slip op. at 8-9.

Some thoughts. First, a substitute teacher writing the opinion (Justice Breyer), adds an additional layer of difficulty should the owner be thinking of asking the Supreme Court to take up this issue. It shouldn't, but it probably does.

Second, that "land use is a sensitive issue of local policy" trope needs to be put in the dustbin. What issues delegated to local governments are not issues of local importance? You could easily categorize nearly any activity regulated by local governments to be important to the local government or community. But that doesn't stop the courts from taking a firm hand and protecting individual constitutional rights from the excesses of local majorities where speech, religion, arms, or searches-and-seizures, is the right alleged to be violated. So why private property? Other than a disdain by federal judges who consider property issues to be "everyday zoning-type dispute[s]," what accounts for this carving out of property rights for special treatment? 

Finally, this is Williamson County revived. Recall that in Knick and Pakdel, the Supreme Court confirmed that an owner doesn't have to chase state compensation procedures to ripen a takings claim, nor does it need to exhaust the government's administrative review process. Yet here we are: the owner's federal takings claim (in either state or federal court), is held in abeyance to let state court proceedings run their course.

29 Greenwood, LLC v. City of Newton, No. 24-1518 (1st Cir. Feb. 4, 2025)

Show Me The Money: Reg Takings Claim Ripe Because City Made Its Decision Even If Owner Could Have Administratively Appealed

Nothing to do with the case, beyond the owner's name.
But c'mon, its ABBA.

Ms. Money and her spouse own a home in San Marcos, Texas. That home is in a historic district.

But it turns out that some of that history isn't pretty: one of the previous owners was "notoriously associated with the Ku Klux Klan." Yikes. And to make it worse, that owner, a certain Frank Zimmerman, branded the home by installing a Juliet balcony with a big ol' wrought iron "Z" on the front of the house.

Very understandably, once they found out this detail (after they purchased the home), Ms. Money and her spouse wanted the Z gone. First the good news: although the home is in a historic district, the structure itself isn't historic. So there's that. But game not over, because even though it isn't historic, the home nonetheless is in the historic district, meaning that the city's code prohibits removing things like the "Z" without the city's permission, even where that Z was put there by a Klan guy .

So Money asked. No, sorry, said the city's Historic Preservation Commission: Klan guy or not, that Z is historic, and you can't take it down. Don't like that? Then you can appeal from the Commission to the Zoning Board of Adjustment under the city's code.

But "the Moneys concluded that an appeal would be futile." So they sued, asserting facial and as-applied physical takings claims under both the U.S. and Texas Constitutions. The city sought dismissal, on the grounds that the takings claim was not ripe because the city had not made a final decision; Money could appeal the Commission's denial to the ZBA. Seems like a legit argument, at least if you buy the theory that even though the Supreme Court has emphasized that you don't need to exhaust administrative remedies to ripen a federal takings claim, the government must have made a "final decision." Emphasis on the "final." The District Court agreed with the city and dismissed, and sua sponte threw in a 12(b)(6) dismissal for failure to state a claim for good measure.

In Money v. City of San Marcos, No. 24-50187 (Feb. 7, 2025), the U.S. Court of Appeals for the Fifth Circuit reversed. As the court framed it, the district court held the claim unripe because "these per se takings claims are not ripe because the Moneys did not appeal the Commission's denial to the Zoning Board, and therefore did not receive a final decision." Slip op. at 4-5. (Note: in the Fifth Circuit, the "final decision" requirement applies to all takings claims, physical and regulatory, unlike other circuits where the requirement does not apply to physical takings claims; the court here noted that rule makes little sense, but concluded in essence, "it's circuit precedent, so what the hell.")

This physical takings claim is ripe, held the court. The requirement is for finality, not exhaustion:

As for the as-applied challenge, the district court seems to have conflated finality with exhaustion. The Moneys received written notice that their “request for a Certificate of Appropriateness to allow the removal of the wrought iron Juliette balcony on the second story of the front façade was denied by the Historic Preservation Commission on May 4, 2023.” The notice informed them that applicants “may appeal a final decision of the Historic Preservation Commission on an application for a certificate of appropriateness to the Zoning Board of Adjustments within ten (10) days of the Historic Preservation Commission’s action on the application.” It also included instructions on how to submit this appeal. The Commission’s denial satisfied the finality requirement. The Moneys were not obligated to exhaust their remedies by filing an appeal. Their as-applied takings claim is also prudentially ripe.

Slip op. at 6.

The court declined to decide whether exhaustion is required to ripen a Texas constitutional takings claim. See slip op. at 7 ("Because appealing the Commission’s denial would not have mooted the Moneys’ Texas Constitution claims, we need not decide whether the caselaw requiring exhaustion would otherwise apply.").

As for the district court's sua sponte 12(b)(6) of the Money's federal physical takings claim? That went down too. The complaint alleged that by refusing to allow removal of the offensive "Z," the city required the Moneys to endure an unwanted physical occupation of their land. Relying as you might expect on Loretto, the court compared the situation there, and concluded this one is pretty much the same in all relevant aspects:

Here, the district court dismissed the Moneys’ as-applied per se takings claim after concluding that the alleged facts are governed by Penn Central, not Loretto. We disagree. We see no meaningful distinction between the allegations in the Moneys’ complaint and Loretto. Both here and there, a government ordinance prohibited a building owner from removing an object that was already attached to the exterior of his building when he purchased it. Likewise, both the Z and the cable equipment were installed at a former owner’s discretion, not pursuant to government action or regulation, but subsequently enacted public ordinances prohibited removal. The district court erred by sua sponte dismissing this claim under Rule 12(b)(6).

Slip op. at 10 (footnote omitted).

About the only thing about this opinion that we don't care for is that it is unpublished.

Too bad, it is worthy of being precedential.

Money v. City of San Marcos, No. 24-50187 (5th Cir. Feb. 7, 2025) (unpub.)

New Article: Timothy Harris, "Revisiting Palazzolo: The Blurry Lines Between Ripeness and Standing that Enable Windfalls," 73 Kan. L. Rev. 289 (2024)

Check out, the latest from Professor Timothy Harris, "Revisiting Palazzolo: The Blurry Lines Between Ripeness and Standing that Enable Windfalls," 73 Kan. L. Rev. 289 (2024). He dives into the question of whether an owner who acquires property already subject to regulations that allegedly work a taking may assert a claim, or does that claim belong only to the prior owner?

Here's the Abstract:

When property changes hands, the pre-existing right of the seller to bring an inverse condemnation claim against the government does not always pass to a subsequent owner. Sometimes it does. If valid takings claims expire on sale, the government may experience a windfall. But if a buyer gets a deal on burdened property and then sues under a prior owners’ takings claim, the new property owner gets a windfall. Established Supreme Court rules draw distinctions between the character of various “takings” to determine whether a claim survives a transfer of ownership. But the character of these distinctions is blurred (along with the rights of landowners) in Washington, Louisiana, and other states that continue to follow the “subsequent purchaser role” which is inconsistent with the U.S. Supreme Court’s ruling in Palazzolo v. Rhode Island. The determination of who gets the windfall may depend on the narrow distinction of whether a subsequent purchaser’s status turns on the doctrine of “standing” or “ripeness.”

Among other cases, the article analyzes decision by the Washington Supreme Court dismissing a takings claim because the claim belonged to the prior owner of the property. We posted about that case here. Professor Harris writes that "[e]ither the Washington Supreme Court is incredibly sloppy, or it was deliberately attempting to expand the reach of the questionable 'subsequent purchaser doctrine.'" He has equally critical comments about other courts that adhere to the same analysis.

Professor Harris concludes that "[t]he fact that a claimant purchased property that was subject to a prior regulation should not be an automatic bar to an inverse condemnation claim--as it is under the "subsequent purchaser rule.'"

Worth reading. Definitely check this one out.

A Takings Clause Vibe In A Second Amendment Case

We've been following a Second Amendment case, Hawaii v. Wilson, as it awaited the U.S. Supreme Court's decision whether to accept review. Not because it is relevant to the usual subjects of this blog, but because a friend and colleague is Counsel of Record for the petitioner, and we're just naturally interested in cases from the 808 that involve locally-disfavored rights. In that case, the right to keep and bear arms.

The Hawaii Supreme Court refused to consider a criminal defendant's defense that to prosecute him for carrying a firearm publicly violated the Second Amendment, concluding he lacked standing under Hawaii law because he had not sought a license to carry a firearm.  

Today, in this Order, the Court denied certiorari. But three Justices issued or joined statements (Thomas, Alito, Gorsuch). And Justice Thomas's statement revealed this Fifth Amendment nugget:

Our rejection of state procedural restrictions on the invocation of constitutional defenses follows from the fact that constitutional rights are “self-executing prohibitions on governmental action.” City of Boerne v. Flores, 521 U. S. 507, 524 (1997). A constitutional violation accrues the moment the government undertakes an unconstitutional act. For example, a violation of the Takings Clause occurs “at the time of the taking.” Knick v. Township of Scott, 588 U. S. 180, 194 (2019). And, the availability of state-law compensation remedies cannot delay or undo the accrual of a takings claim. See id., at 193–194.

The same principles apply to the Second Amendment. That Amendment is similarly self-executing, and a State transgresses it as soon as the State implements a licensing regime that is inconsistent with the Nation’s “historical tradition of firearm regulation.” Bruen, 597 U. S., at 17. Judicial review of a license denial may be one way that an individual can challenge state overreach. But, because the constitutional violation occurs as soon as an individual’s right to bear arms is inhibited, States cannot mandate that would-be gun owners go through an unconstitutional licensing process before they may invoke their Second Amendment rights. Any other rule would impermissibly demote the Second Amendment “to the status of a poor relation”among constitutional rights. Knick, 588 U. S., at 189 (internal quotation marks omitted).

Had the Hawaii Supreme Court followed its duty to consider the merits of Wilson’s defense, the licensing scheme’s unconstitutionality should have been apparent.

Statement at 5.

As we read that passage, Justice Thomas is saying that claims of unconstitutional government action may be raised it multiple procedural contexts, and are "self-executing" -- meaning that they are inherent limitations on government action and should not be subject to unnecessary procedural hurdles or restrictions, something we already understood (at least in part) about the Takings Clause (see, for example, the California raisin case where the Court held that the owner could raise a takings argument as a defense to an enforcement action).

And just to be clear, in our minds that is a slightly different "self-executing" context than the usual way we see the term invoked in takings cases, where it is used to describe the idea that legislative recognition of a cause of action, an ability to sue, and a remedy is not necessary, because the text of the Fifth Amendment sets it out. 

And there's also another Knick angle here in Justice Thomas's statement, where he wrote that the Hawaii court's refusal to consider the federal constitutional argument "contravenes the settled principle that Americans need not engage in empty formalities before they can invoke their constitutional rights, and it wrongly reduces the Second Amendment to a 'second-class right.'" Statement at 1. Perhaps no better illustration of this principle is the "final decision" ripeness rule in takings cases, which allows local land use regulators to establish all kinds of "empty formalities" that lower courts point to when they want to avoid deciding these type of cases.

If only the Supreme Court would apply the "no empty formalities" rule to those cases as well.

Statement of Justice Thomas, with whom Justice Alito joins, respecting the denial of certiorari, Wilson v....

CA11: Takings Claim Not Ready Despite Govt's Enforcement Actions

Lake Worth: the "lago" in Mar-a-Lago

You know his name. He's taken on the City of Riviera Beach twice at the U.S. Supreme Court. And won both times. The houseboat that isn't a boat. The government can't shut you out from speaking your mind simply because you irritate them.

That's right, it's Fane Lozman. A "Florida Man" that you can like and admire. And he's back for Round 3.

He owns property that's mostly in (in, not near) Lake Worth. Two-tenths of an acre is uplands, and the rest (7.75 acres) is submerged. As the Eleventh Circuit noted, "[o]nly a sliver of Lozman's property is above water." 

The city, in accordance with the usual approach to land use regulation has a comprehensive plan. That plan designates submerged lands as "Special Preservation Future Land Use," a label which should set off your Lucas bells, because it mostly sounds like no use. Sure enough, that designation originally "preclude[d] any development of Submerged Lands ... to the maximum extent permissible by law."

Perhaps understanding the legal jeopardy which that put the city in, in 2010 it amended the plan to allow some uses. At the time Lozman purchased the property in 2014, the designation at least in theory allowed private residential fishing or viewing platforms and docks, and -- get this -- included a "savings clause" that prohibited the city from denying uses that were "judicially determined vested rights to develop or alter submerged lands." We see what you did there, city. In 2021, the city tweaked the plan a bit more, limiting such vested uses to a one-per-20-acre density.

But that's not the end of the story. Turns out that until after Lozman's 2014 purchase, the underlying zoning did not conform to the restrictive "Special Preservation Land Use" general plan designation. Uh oh. Indeed, the zoning allowed development of single-family homes. That was a great disturbance in the Force, and that sound you hear is the collective voices of municipal lawyers and planners crying out in terror. Eventually the city caught on, and in 2020, when it created a zoning designation that matched the general plan preservation designation.

Lozman was not one to let that slip by:

Lozman says that when he purchased the parcel, he “expected that it could be developed for use as single-family residential lots.” Lozman purchased the property in 2014 for $24,000. But he produced an appraisal valuing the property at $49,833,500 as of October 7, 2020. This valuation depends on Lozman maximizing the property’s “highest and best use”—bulkheading and filling the sub-merged water to create “up to eight one-acre parcels.” The appraisal was also “based on the hypothetical condition that permits could be granted for bulkhead and fill.”

Lozman v. City of Riviera Beach, No. 23-1119, slip op. at 4 (11th Cir. Oct. 16, 2024).

Zoning is king, and it controls what restrictions there are on property uses (right?), so Lozman sued for a Lucas taking in federal court. The district court granted the city summary judgment, but on appeal, the Eleventh Circuit held the case wasn't ripe, under Williamson County's still-surviving "final decision" ripeness rule. You know the drill: before an owner can move forward with a claim that a land use restriction is a taking, the regulating authority must have made a "final decision" about what uses are allowed under the restriction.

While grounded in the entirely rational notion that a court is not able to evaluate whether there's been a taking until it knows what uses an owner can make of property under the challenged restrictions, we know in practice the final decision rule is mostly a finger pointing the way to municipal approval purgatory. Having been incentivized by the Supreme Court to avoid saying "no" with clarity (after all, who wants to be sued for a taking!), while at the same time not wanting to say "yes" (here, for example, the city's restrictions contemplate preservation, not development -- would the city really be ok with seven residences smack dab in the Lago?), the easiest path for the government is to direct the owner into a byzantine maze with no realistic prospect of getting to either a yes or a no. And then hope that the thousand cuts weaken body and soul, and he taps out.

Here, the Eleventh Circuit concluded that Lozman hadn't bothered to ask the city for a development permit, nor the Corps of Engineers for a section 10 dredge-and-fill permit, both of which he would need in order to build up to the use allowed by the zoning. Slip  op. at 6 ("But Lozman has not yet acquired—or applied for—federal or state permits to develop his property."). Easy case, right? No final decision unless the owner asks the city. Or, you don't have to ask if doing so would be futile.

But that isn't all the story. Both the Corps and the State of Florida were (are?) hot on Lozman's tail with enforcement actions. It turns out that he didn't wait for permission, and he built "structures in the Lagoon without authorization in violation of the Rivers and Harbors Act." The State of Florida "instituted a similar action against Lozman in December 2020." Slip op. at 6. In each case, the government agencies obtained rulings preventing Lozman from doing anything.

The Eleventh Circuit disagreed with the district court's granting of summary judgment for the city, holding instead that Lozman did not allege a ripe case, because there's no indication he ever asked the city for permission to develop. The restrictive comprehensive plan were not sufficiently restrictive to show that there's no uses possible (however remote and unrealistic obtaining permission might be). And Lozman had not sought a variance.

The same reasoning applies here. The comprehensive plan alone cannot constitute a final decision on Lozman’s property. That the comprehensive plan includes a material exception permitting development underscores that the plan alone is not a final decision precluding the development of Lozman’s property. Because he has not applied for a permit, variance, or rezoning from Riviera Beach on the application of the comprehensive plan to his property, Lozman has not yet received a final decision on the comprehensive plan’s application to his property.

Slip op. at 9.

Nor a rezoning (on this one, we have real heartburn because a property owner can never be required to seek legislation in order to ripen a takings claim).

The court also rejected -- as most courts do -- the claim that seeking permission was futile. There are always possibilities, and courts are all too willing to accept a municipal claim that if only an owner would do it right, we might approve some use. Even here, where the feds and the state are coming after Lozman when he made uses of the property well short of what the zoning would allow. Anyone actually think any government would let him do anything? 

The Eleventh Circuit may have made short work of his case. And if there's a bright side of life part of the decision is that it reversed the district court's adverse decision on merits, and dismissed his takings claim without prejudice.

And if I were a betting man, I wouldn't count Mr. Lozman out just yet.

Lozman v. City of Riviera Beach, No. 23-11119 (11th Cir. Oct. 16, 2024)

Registration For The 42d ALI-CLE Eminent Domain & Land Valuation Litigation Conference Is Underway (Don't Miss Out!)

Get ready to join your colleagues and friends in San Diego for the 42d ALI-CLE Eminent Domain & Land Valuation Litigation Conference.

The 41st Conference was in New Orleans. Here's a report of that event, and here are our reports from prior conferences in Austin and Scottsdale.

Here are some of the highlights of the upcoming Conference:

• Property Rights at the Supreme Court: DeVillier and Sheetz and What's Next
• Slow Take: Possession, Rent, Relocation, and Offset
• The Jury's View: How Jurors See Your Case
• From Penn Coal to Penn Central: How to Prove "Too Far"
• Leveraging Expertise in Eminent Domain Litigation: Working with Land Planners, Engineers, and Other Predicate Experts
• Kelo at Twenty: What Changed, What Didn't, and What's on the Horizon
• Viva Las Vegas: How the Nevada Judiciary Upheld Property Rights in 180 Land's Inverse Condemnation Taking
• Ethics: Guiding the Trolley: Perspectives on Professional Ethics in Eminent Domain for Lawyers, Appraisers, and Right of Way Agents
• "I Think I Shall Never See" Just Compensation For a Tree: Strategies to Securing Recovery for Trees, Crops, and Fixtures

And more. Check out the complete agenda here. Registration information here. 

We especially welcome first-time participants, or those returning after an absence. Connect (or reconnect) with your colleagues from across the nation.

Don't miss out: we have had record attendance in recent years, so hold your space now.

Come, join us!

New Cert Petition: When State Law Bars Owner From Challenging A Taking, Can Federal Court Abstain?

Here's the latest takings cert petition. This one seeks review of the Seventh Circuit's affirming the district court's sua sponte abstaining from considering a property owner's challenge to a Wisconsin municipality's exercise of eminent domain.

The court concluded that federal courts could -- but shouldn't -- consider the owner's public use challenge because there were ongoing parallel state proceedings (this this case, an eminent domain case in a Wisconsin court). That alone doesn't seem terribly controversial.

But as the petition points out, there was not actually a "parallel" state court proceeding here, because Wisconsin law apparently doesn't permit an owner to challenge public use in the proceeding the Village filed. As the Petition puts it:

The Seventh Circuit Court of Appeals’ particularly broad approach to the Colorado River doctrine stands out among the circuits. In the case at hand, the court of appeals expanded the doctrine even further by effectively overruling the requirement of parallel proceedings. It was clear legally that the state and federal proceedings were not parallel, yet the district court still dismissed the case. In reviewing the district court’s decision, the Seventh Circuit admitted that the two cases presented different issues and that regardless of how the state case was decided, the public use claim would go unanswered, however, the Seventh Circuit still concluded that the two cases were “parallel.”

Pet. at 7.

Ah, we get it: parallel doesn't mean, you know, exactly parallel.

What happened was that the Village took one position on whether the taking was supported by a public use or purpose, and the time for challenging that position lapsed under Wisconsin procedures. You understand that often, property owners are required by condemnation procedures to immediately challenge public use or necessity, and are subject to very short statutes of repose after which you lose the claim. Well here, that apparently occurred...but later and just before the valuation trial was set to commence, the Village said or did something that revealed its hand: the real reason for the taking was not a public use or benefit.

Too late to raise the new issue in state court, the owners filed a section 1983 claim in federal court. The district court on its own abstained, and as we noted above, the Seventh Circuit affirmed, even though it expressly acknowledged that the case didn't squarely fit into the Colorado River abstention doctrine (or any other). This was just a case the federal court shouldn't decide:

That said, the federal and state litigation present different issues. In state court, Antosh and Lashley spent two years contesting the amount of compensation owed for the taking. In federal court, they urge that the taking has been illegitimate all along, because the Village seized their property for a private use under the guise of a public one. So the two suits are not perfectly symmetrical: regardless of how the dust settles in state court, their public use takings claim in federal court will go unanswered.

This lopsidedness, however, is not fatal to a finding that the actions are parallel.

Here is the Question Presented:

Whether the court of appeals erred in affirming the district court, when the Village of Mount Pleasant admitted that it had used eminent domain to take private property for a private purpose (the Foxconn Project), and the district court applied the Colorado River doctrine sua sponte even though the state proceedings were not parallel because the state proceedings were statutorily barred from addressing the Petitioners’ Fifth Amendment public-use claim as well as other constitutional issues.

Two comments.

First, after the Supreme Court decided Knick and re-opened the federal courthouse doors that Williamson County had wrongfully slammed closed for three decades, we wrote that we didn't think that was the end of the story, because government wasn't going to go quietly into that good night and, you know, just sit there and allow property owners to press their claims in federal court.

We also thought that federal courts were not going to warmly embrace their role as civil rights forums, but would maintain the hoary trope that this land usey stuff was beneath their dignity (after all, we're not super zoning boards of appeals, are we?).

This petition is the latest chapter. We filed one in a roughly similar case not too long ago. Maybe this latest one will get more traction.

Second, we take a bit of issue with the way the lower courts characterized the property owners' approach, effectively blaming the owners for not acting sooner (how, exactly could they have challenged public use when the Village said its purpose was "A," and only after the deadline to challenge lapsed said it was "B"?), and subtly and not-so-subtly chastising the owners for doing this at the last minute.

To us, this goes back to Justice Thomas and his thought that if a federal court has jurisdiction, it darn well has the obligation to exercise it. The hands-off approach the federal court took here does not easily fit into any of the existing (and limited, as we understand them) doctrines of abstention, when concerns about comity, respect, and "Our Federalism" counsel a federal court to hold off on its Article III duties for now. Also, are not property owners who are scrapping to hold on to their property against the sovereign's nearly unassailable power entitled to do anything and everything they can to make it happen? We'd think so, even thought courts and condemnors call this bad faith and being greedy. Why should an owner have to "respect" the state court, when she is fighting for her property, and is there an obligation to favor judicial efficiency over her fundamental rights? We find the federal courts' framing of the narrative here to be quite offensive.

Stay tuned here, or follow along on the Court's docket.

Petition for a Writ of Certiorari, Antosh v. Vill. of Mount Pleasant, No. 24-186 (U.S. Aug. 21, 2024)

A Property Rights Advocate Is An Environmentalist Who Has Been Overregulated: Anti-Takings Advocate Argues For The Right To Exclude

You remember that old adage (or maybe its a cliché?) that "a conservative is a liberal who has been mugged?" Well, here's your environmentalist analog.

In Echeverria v. Town of Tubridge, No. 23-AP-291 (Aug. 2, 2024), the Vermont Supreme Court held that property owners' lawsuit asserting their right to prohibit the town from allowing bicycling on hiking trails on their land, and to prohibit it from allowing members of the public onto the property to maintain the trails, is ripe. The owners asserted that as the owners, they alone have the authority "whether and how to maintain the legal trails that cross their property." Slip op. at 2. Here are the details: the owners assert

sole and exclusive authority to decide whether and how to maintain the legal trails that cross their property. They alleged that the expected entry onto their property by volunteers seeking to exercise the Town's maintenance authority will adversely affect their plan to maintain the trails as natural forest paths and minimize destruction of vegetation on the trails. They further alleged that such entry would constitute a trespass and taking in violation of the Vermont and U.S. Constitutions. They sought a declaration that the selectboard does not have the legal authority to engage in maintenance or repair activities on the legal trails of the town or to delegate such authority to private individuals.

Slip op. at 3.

The trial court dismissed, agreeing with the town that the lawsuit was not ripe. No one had actually been authorized to enter the property to maintain the trails. The owners appealed to the Vermont Supreme Court.

None of this would be particularly remarkable, except that the landowner asserting the government overriding his private property right to exclude is a taking is none other than well-known environmental advocate, takings law blogger, and lawprof John Echeverria. The former Director of the now-defunct Georgetown Environmental Law & Policy Institute (those of you who were around when GELPI was active remember it primarily as the leading anti-takings laboratory, and for its annual conference for strategizing ways of defeating takings claims). An anti-takings guy asserting a taking when it comes to his property rights.

Now don't get us wrong: we wish the good law professor well in this quest. We do love it so. Because it brings us a smile -- and perhaps a small frisson of satisfaction -- to witness this road to Damascus moment, especially on the subject of property rights, takings, and ripeness, a topic the plaintiff has written a lot about:

Oh, in case you are interested, the Vermont Supreme Court reversed, and held that the owners' claims are ripe. The court reached this conclusion by treating this as a pleadings matter and not judicial gatekeeping, an analysis we've been pushing on this side for a long time:

We conclude that plaintiffs have satisfied the actual-case-or-controversy requirement here. Plaintiffs allege that the Town has adopted a new policy for maintenance and repair of legal trails. According to plaintiffs, this is the first time in the Town’s history that it has formally asserted authority to maintain and repair legal trails. The Town also established a process for private individuals to apply for and receive permission to exercise the Town’s authority to maintain and repair legal trails. Two of the Town’s four legal trails are on plaintiffs’ property. In sum, the Town has taken concrete steps manifesting its intent to enter onto plaintiffs’ property for the purpose of improving the trails. Assuming as we must for purposes of a motion to dismiss that these allegations are true, they demonstrate a sufficiently concrete threat of physical invasion and interference with plaintiffs’ asserted right to control who enters or alters their property.

Slip op. at 9. The court rejected the town's argument that someone needs to apply for a permit first before the claim becomes ripe:

This case similarly presents a justiciable claim because the Town has formally asserted that it has authority to enter onto plaintiffs’ land for the purpose of maintaining and repairing the legal trails and has created a procedure for implementing that authority, and plaintiffs assert that the Town has no legal authority to do so. This is a purely legal dispute that is appropriate for a declaratory judgment action, and resolution of this question will settle the dispute between the parties.

...

The Town argues that plaintiffs’ action is premature because no person has yet applied to maintain the trails on plaintiffs’ property. However, plaintiffs alleged in their complaint that the selectboard chair told them the Town planned to “sit on” the procedure until plaintiffs’ litigation was resolved. It is reasonable to infer from this statement that the Town fully intends to implement the new procedure and exercise its asserted right to maintain and repair trails once the litigation concludes. Moreover, the filing or granting of an application to exercise the Town’s asserted authority to maintain trails would not add any new dimension to the purely legal question presented by plaintiffs: whether the Town has that authority in the first place. Thus, the fact that no person has yet attempted to maintain the trails on plaintiffs’ property does not render this issue unripe.

Slip op. at 11-12.

And what about the town's claim that the plaintiffs were merely anticipating future action, and the court should wait (we wonder where the town got that argument from)? Nope:

We are also unpersuaded by the Town’s contention that plaintiffs’ feared injury is subject to "voluntary avoidance." The Town argues that plaintiffs have not alleged that anyone has applied to maintain the trails on their property and even if someone did, the Town would still have to review the application. This does not change the fact that the Town has asserted the right to enter, through its agents, onto plaintiffs’ property for the purpose of maintaining the trails. As discussed above, we can reasonably infer that the Town intends to implement its new procedure once this litigation concludes. There is no indication that the Town’s exercise of its asserted authority is contingent on any other actor or regulatory process. The situation here is therefore distinguishable from the cases cited by the Town, where the facts showed that the plaintiffs could avoid the threatened injury through their own avoidance or that the occurrence of the threatened injury depended on the uncertain actions of a third party.

Slip op. at 12.

Welcome to the fight! (Call us if you need an amicus brief down the road in support of your right to exclude and for compensation for a taking if the town keeps pressing.)

Echeverria v. Town of Tubridge, No. 23-AP-291 (Vt. Aug. 2, 2024)

New Cert Petition: After Permit Denial, To Ripen A Takings Claim Do You Have To Keep On Trying?

Check this out, the latest takings cert petition from the Pacific Legal Foundation shop.

Since this is one of ours (our colleague Chris Kieser is in the lead), we're not going into too much detail, but will say that this involves ripeness in a regulatory takings claims, a topic we've been focused on a lot lately.

The question here is once the government says "no" to a development plan, must the owner keep on asking? What's that old adage? If at first you don't succeed, try and try again? We know that in land use, that means as long as the government says it is willing to "clarify" or "change" its decision (something it almost always asserts it is able and willing to do), most courts will very likely never hold it to task. Planning authorities know this, and as a consequence are hardwired to almost never say no, and only "no, but..." or "maybe." Which puts owners in permit purgatory. Or as The Eagles noted, "you can check out any time you like, but you can never leave."

Until the Supreme Court wakes up to this dynamic, nothing is likely to change.

Here's the Question Presented:

Lemon Bay Cove, LLC, sought permission from the United States Army Corps of Engineers to develop coastal property in Charlotte County, Florida. After soliciting public comment concerning the environmental impact of the proposed project, the Corps told Lemon Bay to look for a different parcel to develop. More than three years later, the Corps denied Lemon Bay’s permit application with prejudice. Lemon Bay sued, arguing that the denial of the permit deprived the land of all economically viable use and thus effected a per se taking under Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). The Court of Federal Claims held that Lemon Bay had not shown a denial of all economically viable use because it could have asked the Corps for permission to build a smaller development that might have been approved.

The question presented is whether a regulatory takings claim seeking just compensation under Lucas may be defeated by the mere possibility that a permitting authority might have approved a smaller development proposal.

Lawprof Dennis Crouch has written up the case in more details at the Patently-O blog, in his post "Bleak House Revisited: Lemon Bay Cove and the Regulatory Takings Quagmire." Recommended reading.

Follow along as the case progresses here, or on the Court's docket.

Petition for Writ of Certiorari, Lemon Bay Cove, LLC v. United States, No. 24-134 (U.S. Aug. 2, 2024)

Relying On Complaint's Allegation That City Issued A Permit As Confirmed By Chief Building Officer Email, Texas App Holds Takings Claim Ripe Even Though City Said Council Must Issue Permits

Check out City of Kemah v. Crow, No. 01-23-00417-CV (July 25, 2024), from the Texas Court of Appeal (First District).

This is yet another takings ripeness case -- here, the so-called "final decision" requirement -- the second recent opinion on this issue from the Texas court. See "Final Decision Takings Ripeness Is Based On All Circumstances, Not Hard-And-Fast Requirements (Read That Again: A Factual Question)" for our write-up of the other case.

In this one, the owner asserted that the city issued her a building permit for her "barndominium" and and two other structures to be used as short-term rentals, but later issued a stop work order. This resulted in a Penn Central taking, she asserted.   

The city sought ripeness dismissal, asserting the owner didn't actually have a permit issued by the city council as its ordinances require. The owner didn't have the actual permit, but her complaint alleged that she did have emails from the City's Planning officer and City Manager saying she had a permit, and her complaint also included allegations that these and other city officials repeatedly confirmed that she had the permit. See pages 2-9 of the slip opinion for the details as recited by the court.

The city argued that emails and other communications with city officials don't count, and only the city council can issue permits. Yes, she applied for a permit, but the city council has never approved one.

The City argued that Crow never obtained a final decision from the City on her permit application. Specifically, it asserted that although Crow claimed to have received an email from Shoaf advising her of the City’s approval of her permit application, she failed to allege facts showing the actual issuance of such a permit or the City’s denial of her application. It further argued that Crow did not allege that she obtained a variance, or that her alleged variance request was denied, and she failed to allege facts showing that re-application for a building permit would be futile. Thus, it argued, Crow failed to present a ripe claim over which the trial court could assert subject matter jurisdiction.

Slip op. at 9-10.

No official final decision from the council = takings claim not ripe.

The court limited itself to the allegations in the complaint: we take those allegations and the attachments to the complaint (including, inter alia, the emails from the planning and city officials saying 'you have a permit') as true, and if proven, this would be enough to show that the city made enough of a final decision to consider the takings claim on the merits, even though the city now claims it didn't make a formal, official permit grant. The city made enough of a final decision to show the case was ripe:

In support of her allegation that the City issued her a building permit, Crow attached copies of the emails and texts above as exhibits to her amended petition. Crow also attached a transcript of the minutes from the February 16, 2022 City Council meeting. At the meeting, Mayor Joiner stated, “[Item] 24. Discussion, consideration, and possible action on a request to lift the stop work order on 1306 Fay Road, Kemah, Texas 77565, Owner Veronica Crow, request for the city to provide a hard copy of the permit for 1306 Fay Road, Kemah, Texas 77565, issued under No. 210603007 . . . .” Also attached to Crow’s amended petition is a December 10, 2021 email from Shoaf to the Mayor and City Council providing an update on 1306 Fay Road. In the email, Shoaf stated, “It has also been brought to the attention of Walter [Gant] and myself that a member of Council has reached out to the permit holder.” (emphasis added)

Crow alleged that she was issued a permit to build on 1306 Fay Road in July 2021, constituting the final determination of her permit application, the City then denied Crow her right to proceed with construction under that permit, and later denied that the permit ever existed. Crow alleged that she sustained the loss of investment-backed expectations as a result of the City’s improper, intentional, and wrongful conduct, which amounts to a taking under the Texas Constitution. Taking her factual allegations as true, as we must, we conclude that Crow’s claim is ripe.

Slip op. at 17-18.

Here's a practical lesson that we take from this case and others: we know that in most jurisdictions, a complaint only need meet the fairly low bar of "notice pleading" tempered (in federal courts) by Twiqbal "plausibility." And that ripeness is generally a defense and not an essential element of a claim. But when pleading regulatory takings, property owners are seemingly held to a higher standard.

That being so, if you have the facts and the documents to anticipatorily plead the case is ripe, you should do what Crow's lawyers did her: plead with specificity like this was a fraud claim, and attach the documents to the complaint. Yes, it might not be required, but there's little harm in it, and doing so might avoid all kinds of mischief wrought by defendants and courts looking to get rid of your claim. 

PS - can we move all of our clients' properties to Texas, please? 

City of Kemah v. Crow, No. 01-23-00417-CV (Tex. App. July 25, 2024)

CA9: Unannounced Inspections As Condition Of Falconry License Are Subject To Nollan/Dolan Challenge

On the surface, the U.S. Court of Appeals for the Ninth Circuit's opinion in Stavrianoudakis v. U.S. Fish & Wildlife Svc., No. 22-16788 (July 25, 2024) is about Article III standing (a highly technical gateway issue that is very federal courts wonky).

But taking a deeper look offers an insight into ways other than the usual Fifth Amendment arguments for protecting property rights. [Before we go on, a disclosure: this is one of our cases, argued and won by PLF colleague Daniel Woislaw].

This is a case involving the sport of falconry. Can't say that we knew too much about that -- until maybe the occasional movie -- until this case. First (and this may not come as a surprise to you who have been observing what things the government finds worthy of regulations and licensing), did you know that every state government except Hawaii has adopted regulations governing falconry? Nor did we, until now. Second, there used to be "parallel federal and state permitting systems," but the feds backed out in light of every state doing it; now, once the feds certify a state's regulations satisfy federal standards, the feds are out. 

California's regulations are one of those, and require that falconers renew licenses annually:

Consistent with federal requirements, California authorizes unannounced inspections: CDFW “may conduct unannounced visits to inspect facilities, equipment, or raptors possessed by the licensee, and may enter the facilities of any licensee when the licensee is present during a reasonable time of the day and on any day of the week” and “may also inspect, audit, or copy any permit, license, book, or other record required to be kept by the licensee under these regulations at any time.” Cal. Code Regs. tit. 14, § 670(j)(3)(A).

Slip op. at 8. To get a California license, a falconer must certify that he or she agrees that the premises, equipment, or the falcons themselves "are subject to unannounced inspection." If you don't agree, you are not getting a license or a renewal.

Several falconers and the American Falconry Conservancy sued the feds, and state officials in federal court, challenging past unannounced inspections under the First, Fourth, and Fourteenth Amendments, and the Administrative Procedures Act. The district court dismissed for lack of standing, but granted leave to amend the Fourth Amendment claim.

Here's the breakdown of the operative second amended complaint's claims against the unannounced-and-warrantless-inspections scheme:

• A facial 4A claim: conditioning a license on the licensee's agreement to forego his rights is an unconstitutional condition.
• The same unconstitutional conditions claim, but as-applied to these plaintiffs.
• The scheme allowing warrantless searches facially violates 4A.
• Same claim, as-applied.
• A co-habitant of one of the falconers asserted the scheme violates her 4A rights.
• APA claim.

The district court didn't find the amendments did much of anything and dismissed all 4A claims without leave to amend. The threat of future inspections was too speculative, and the Conservancy lacked associational standing.

A 2-1 panel of the Ninth Circuit reversed, in part. The court held that the falconers have standing to challenge the California officials, but not the Fish & Wildlife Service. We're not going to explore in depth the court's analysis (you can read that yourself, and we recommend you do so - start on page 12 of the slip opinion).

The most interesting stuff in the opinion (in our opinion) is the court's description of the claims. Yes, the government can impose conditions on the conferral of some benefit, but those conditions cannot include the relinquishment of a constitutional right. Slip op. at 13. We are used to seeing this in the land-use exactions context, where the right to compensation is the right a plaintiff is compelled to surrender. But here, the constitutional rights in the warrant requirement in the Fourth Amendment:

We have recognized that the unconstitutional-conditions “doctrine is especially important in the Fourth Amendment context” because, “[u]nder modern Fourth Amendment jurisprudence, whether a search has occurred depends on whether a reasonable expectation of privacy has been violated.” United States v. Scott, 450 F.3d 863, 867 (9th Cir. 2006) (citing Katz v. United States, 389 U.S. 347, 361 (1967) (Harlan, J., concurring)). “Pervasively imposing an intrusive search regime as the price of [a discretionary government benefit], just like imposing such a regime outright, can contribute to the downward ratchet of privacy expectations.” Id. Accordingly, the doctrine applies when the government attempts to “exact waivers of rights as a condition of benefits, even when those benefits are fully discretionary.” Id. at 866–67.

Id.

The injury for standing purposes occurs "when the government succeeds in pressuring the plaintiff into forfeiting a constitutional right in exchange for a benefit or the government withholds the benefit based on the plaintiff's refusal to surrender a constitutional right." Slip op. at 14 (citing Koontz). It's the dirty demand that is the problem, not "whether the government ultimately succeeds in pressuring someone into forfeiting a constitutional right[.]" Id. See also slip op. at 16 ("Therefore, the Falconers’ alleged injury in fact is the forced choice: retention of their Fourth Amendment rights or receipt of a falconry license, which is required to lawfully practice falconry.").

That being so, the plaintiffs have standing to bring such a claim against the California officials:

The question presented here is whether simply agreeing to submit to those inspections, in the absence of an actual inspection—see Part II.B—amounts to the relinquishment of Fourth Amendment rights. We conclude that it does. By successfully applying for a falconry license, the Falconers certify that they will forego a claim to Fourth Amendment protections. An inspection may not occur or, if it does, it may not violate the Fourth Amendment because it is reasonable. But the idea that the Falconers surrender nothing unless and until an unlawful inspection occurs—that California extracts a blanket waiver that is, in fact, entirely superfluous—defies logic. Rather, we take the regulation to mean what it says, and agreeing to unannounced, warrantless inspections without any consideration of the reasonableness of such inspections implicates Fourth Amendment rights.

Slip op. at 15.

The court did not view the claims the same way as against the USFWS, and concluded these claims are not ripe. The feds delegated falconry licensing to California, so the plaintiffs have not suffered an injury directly traceable to the feds. And the falconers have not sought, nor have they been granted, a federal license (indeed, they could not do either of these because as noted above, the feds no longer process falconry licenses, only the states).

The court affirmed the dismissal for lack of standing the as-applied warrantless search claims, primarily "because they have not alleged that they were subject to warrantless inspection under the challenged regulations." Slip op. at 22. Unlike the unconstitutional conditions claims, the court viewed the wrong here as not merely being subject to the requirement, but on the government actually making a warrantless search.

Slip op. at 23.

One judge concurred in part and dissented in part, agreeing that the lack-of-standing dismissal was ok because there's not been any actual warrantless searches, but arguing that the "Falconers have standing to challenge the state regulations under the unconstitutional-conditions doctrine[.]" Slip op. at 29 (S.R. Thomas, J., dissenting in part). The panel majority broke new ground in focusing on the demand as the constitutional wrong: "[i]ndeed no federal court has held that the act of giving consent itself constitutes injury absent an actual or imminently impending search. The majority’s assertion that Falconers are injured 'every time they renew their licenses,' is unsupported by precedent. Id. at 33 (S.R. Thomas, J., dissenting in part).

This case is a good reminder that there's more than one way to skin the property rights cat. Yes, we focus on the Just Compensation requirement. But we should not overlook other ways to protecting private property rights.

Stavrianoudakis v. United States Fish & Wildlife Service, No. 22-16788 (9th Cir. July 25, 2024)

Final Decision Takings Ripeness Is Based On All Circumstances, Not Hard-And-Fast Requirements (Read That Again: A Factual Question)

We suggest those of you interested in takings ripeness -- here, the so-called "final decision" requirement -- take a quick gander at the Texas Court of Appeals' opinion in City of Buda v. N.M. Edificios, LLC, No. 07-23-00427-CV (July 2, 2024).

We won't go into the details, except to say that a property owner developing its land entered into an agreement with the city, under which the owner would grant a drainage easement to the city to alleviate citywide flooding, while the city was obligated to construct drainage improvements. When the owner submitted a plan, the city instructed it to "provide additional drainage improvements on the property." Slip op. at 2. Not so fast, said the owner: the city, not me, is on the hook for these additional improvements. If you condition approval of my development plans on me providing more drainage stuff, that's a taking (what the court calls "an investment-backed or regulatory taking," which we assume means Texas's versions of Penn Central or Nollan).

The city asserted these claims were not ripe because the owner had not submitted an application, and the city consequently had not denied said application. No application, no decision. "Buda argues that a final decision typically requires both a rejected development plan and the denial of a variance from the controlling regulations." Slip op. at 4. The owner countered by pointing out the fact that at the city's lawyer's "direction," the city stopped the application process.

While it is true that in many cases, an application, denial, and variance are what ripen a claim, That's true, the court concluded, but the application rule is merely the "usual" rule, and not a requirement in every case:

"'[U]sually' does not imply a hard and fast rule but, rather, a determination dependent on relevant circumstances. Indeed, futility may be one of those circumstances, that is, requiring a complaint to engage in futile ventures. Thus, a 'final decision' may take different forms. And, we cannot see why exclusion from the castle should be less definitive because it came from the captain as opposed to the king. It is not farfetched to conclude that directives from the City's legal counsel to those at the gate could be found sufficient to render futile additional attempts by Edificios to gain entry into the realm of the city council. And, to the extent we have an affiant attesting that such directives were made, there exists a question of fact pretermitting our adoption of the City's position on ripeness.

Slip op. at 5-6 (citations omitted).

The court emphasized that these are factual disputes, not legal questions to be resolved at the pleadings/jurisdiction stage: "the issue as presented by Buda sounds more like an attack on the merits of Edificio's cause of action rather than a jurisdictional inquiry. As said previously, consideration of the underlying merits of the claim generally lies outside the scope of review when address pleas to the trial court's jurisdiction." Slip op. at 6-7.

The court concluded: "[s]uch review will happen, if it happens at all, after the trial court has been presented with a fully developed record and comes to a final substantive judgment on the matter." Slip op. at 7.

It's good to see at least one court that "gets it." In many cases where a takings plaintiff's complaint alleges that it received some kind of final decision from the government about development plans -- even where that decision is not via the government's claimed official or usual process for eliciting such decisions -- it should be a factual question, not one for the court's pleading-stage gatekeeping.

If a factual allegation is Twiqbal-plausible that the government has made a decision such that the court on the merits can measure the owner's property losses – a determination that should not be based on any judgment call on the merits of the claim at this stage, but only on whether the facts as alleged are within the realm of possibility, that should be enough to get to the next stage.

It may be, in the court's view, a weak claim. But don’t weak - but plausible - claims have the right to move past pleadings? The purpose of 12(b) screening is to get rid of cases where there’s no actual controversy ((b)(1) jurisdictional ripeness), or those where the alleged facts are fantastic and don’t add up to a claim ((b)(6) (i.e., the complaint pleads only a diminution of value and doesn’t allege anything about character or expectations). It is the function of Rule 56 summary judgment to weed out those claims that are factually weak and should not waste judicial resources with a trial. Not, as many courts conclude, Rule 12 dismissal.

As the Texas court noted, "[s]uch review will happen, if it happens at all, after the trial court has been presented with a fully developed record and comes to a final substantive judgment on the matter."

Study this one.  

City of Buda v. N.M. Edificios, LLC, No. 07-23-00427-CV (Tex. Ct. App. July 2, 2024)

Games Government Play: Ninth Circuit Doesn't Buy Attempt To Moot Constitutional Challenge To Co-19 Vaccination Policy By Sandbagging And Withdrawing

Games people play
Night or day they're just not matchin'
What they should do
Keeps me feelin' blue
Been down too long
Right, wrong, I just can't stop it

This one isn't about takings, but is nonetheless a must-read.

In Health Freedom Defense Fund, Inc. v. Carvalho, No. 22-55908 (June 7, 2024), a panel of the U.S. Court of Appeals for the Ninth Circuit (yes, the Ninth Circuit!) held that the litigation was not moot even though the government had revised the challenged regulation. The Ninth Circuit also vacated and remanded the District Court's dismissal of the challenge to the Los Angeles Unified School District's requirement that its employees be vaccinated 

The sequence of facts is important. Check out the shell game shenanigans that LAUSD went through, after which it told the courts with a straight face that this was just routine and not it playing litigation games:

• LAUSD required all employees to have or get the Co-19 vaccination, and was silent about any exceptions.
• The plaintiffs sued, arguing that mandatory vaccinations are unconstitutional.
• The next day, LAUSD issued a "clarifying memorandum" that said that employees who didn't want to get the vaccine could get tested. Thus, it argued, we're not imposing a mandatory vaccine.
• LAUSD sought dismissal - the complaint was either unripe or moot.
• District Court agreed and dismissed for ripeness ("because that policy was changed before it was ever enforced, the dispute remained unripe").
• After dismissal, LAUSD "reversed course again two weeks later[,]" to eliminate the testing option.
• A second lawsuit followed. This time the plaintiffs also alleged that the vaccine is not really a vaccine as that term has been commonly used, meaning something to prevent transmission. Instead, they alleged, the Co-19 was merely a treatment, not a preventative.
• LAUSD sought judgment on the pleadings, which the District Court granted. It relied on Jacobson and rational basis review. As long as there's a conceivable public purpose all's ok. And here it is conceivable that the mandatory vaccine policy would help the public health.
• Next stop, Ninth Circuit. After its answering brief "vigorously defended" the vaccine mandate without making any suggestion that the mandate might be revoked, the court heard oral arguments, with LAUSD confirming during argument that the policy was "still in place."
• After the arguments, however, LAUSD's lawyer (at least according to a declaration submitted by plaintiffs' counsel) said to him "What are you going to do when we rescind the mandate?" Slip op. at 11.
• Same day: LAUSD began the process to rescind, and less than two weeks later, LAUSD "voted to rescind the Policy[.]" But it still kept its options open, and cautioned that if the situation required a return to the vaccine requirement, "LAUSD would reconsider the Policy."
• LAUSD then asked the Ninth Circuit to dismiss, arguing that the complaint was moot: after all we reversed the policy, right?

The Ninth Circuit concluded that the case was not moot: LAUSD's actions came after the litigation was instituted, and did not fall under the "voluntary cessation" exception to mootness. In most cases, the defendant stopping the challenged conduct on its own does not moot a case, unless it is "reasonably clear that the challenged practice will not happen again," and that "any effects of the alleged violation must be permanently reversed." Slip op. at 13.

Here, the Ninth Circuit held, "LAUSD's pattern of withdrawing and then reinstating its vaccination policies is enough to keep this case alive." Id. The pattern here was that "[t]wice LAUSD has withdrawing its policy only after facing some litigation risk[,]" after which it returned "to its old ways." Slip op. at 14. The court characterized this as a "willingness to tactically manipulate the federal courts[,]" rendering "LAUSD's timing ... suspect." Id.

This conclusion was driven by a practical and common sense view of the government's  pattern of strategic litigation behavior (we'd call it "sandbagging"), and not by simply accepting its arguments about what it was up to:

Given the detailed procedural history summarized earlier, the record at least supports a strong inference that LAUSD waited to see how the oral argument in this court proceeded before determining whether to maintain the Policy or to go forward with a pre-prepared repeal option. LAUSD appears to have twice sought to manipulate the federal courts to avoid an adverse ruling on this issue. Moreover, the Board expressly reserved the option to again consider imposing a vaccine mandate. This confirms that LAUSD has not carried its heavy burden to show that there is no reasonable possibility that it will again revert to imposing a similar policy.

Id.

On the merits, the panel rejected Jacobson's "direct" application, concluding that Jacobson only governs when the government requires a vaccine, which is an inoculation to prevent the spread of a disease. This distinction is critical:

The district court relied on Jacobson to hold that the Policy was rooted in a legitimate government interest. Reilly, 2022 WL 5442479, at *5−6. But Jacobson does not directly control based on Plaintiffs’ allegations. In Jacobson, the Supreme Court balanced an individual’s liberty interest in declining an unwanted smallpox vaccine against the State’s interest in preventing disease. 197 U.S. at 38. The Court explained that the “principle of vaccination” is “to prevent the spread of smallpox.” Id. at 31–32. Because of this, the Court concluded that the State’s interest superseded Jacobson’s liberty interest, and the vaccine requirement was constitutional. Id.

Plaintiffs argue that a “traditional vaccine” must provide immunity and prevent transmission, meaning that it must “prevent the spread” of COVID-19. Plaintiffs allege that the vaccine does not effectively prevent spread, but only mitigates symptoms for the recipient. And Plaintiffs claim that something that only does the latter, but not the former, is like a medical treatment, not a “traditional” vaccine. This interpretation distinguishes Jacobson, thus presenting a different government interest.

Putting that aside, the district court held that, even if it is true that the vaccine does not “prevent the spread,” Jacobson still dictates that the vaccine mandate challenged here is subject to, and survives, the rational basis test. The district court reasoned that “Jacobson does not require that a vaccine have the specific purpose of preventing disease.” Reilly, 2022 WL 5442479, at *5 (emphasis in original). It acknowledged Plaintiffs’ allegations that the vaccine did not “prevent transmission or contraction of COVID-19.” Id. at *6. But it declared that “these features of the vaccine further the purpose of protecting LAUSD students and employees from COVID-19,” and thus “the Policy survives rational basis review.” Id.

This misapplies Jacobson. Jacobson held that mandatory vaccinations were rationally related to “preventing the spread” of smallpox. 197 U.S. at 30[.]

Slip op. at 17-18. 

In short, "government's power to mandate prophylactic measures aimed at preventing the recipient from spreading disease to others" is not the same as "forced medical treatment" claimed to protect the recipient. Slip op. at 18. The property analogy is that you don't have a property right to use your property in a way that injures someone else's property, but it isn't a nuisance to make a use that is harmful to your property interests. That's your right.

This is a correct (narrow) reading of Jacobson, a case which, in our opinion, has been widely over-read (esp during the Co-19 lockdowns) to conclude that your life, liberty, and property could be curtailed as long as the government claims to be acting generally for the public health, and if taken to the logical extreme, in the public interest. That, in our view, is the limited exception swallowing the rule. But most courts have bought the argument. 

Before you get too excited about this, remember that this was up on appeal from a 12(b)(6) dismissal, so the complaint's factual allegations -- including, critically, the allegation that the Co-19 vaccine does not prevent the spread and only relieves symptoms -- are going to be subject to proof as the case progresses after remand. See slip op. at 19 ("We note the preliminary nature of our holding. We do not prejudge whether, on a more developed factual record, Plaintiffs’ allegations will prove true.").

A few thoughts for how this opinion might be useful for you takings mavens:

• Trial courts have no business evaluating the veracity of the factual allegations in the complaint, and Twiqbal doesn't change that by allowing a court to be skeptical under the guise of plausibility and act as a gatekeeper to screen the government from what the court views as claims that are unlikely to be proven. Yet we dirt lawyers know that in takings cases, trial courts do it all the time. Whether it is balancing the Penn Central factors at the pleadings stage, or the court apparently concluding that it doesn't buy the pleaded facts, courts are happy to bounce takings complaints at the pleadings stages. This opinion offers a better model.
• Courts often just take the government at its word. "Our law is ____." "Our procedures require ______." And the plaintiff's response that "what the government says its law is isn't really what its law says ... here, read it yourselves, Your Honors," and "the court is the expert on what the law requires, not the government" often fall on deaf ears. (It's also intellectually lazy, but you didn't hear that from us.) We see this most frequently in takings ripeness cases where the plaintiff says the government has taken a solid position about what uses are and are not allowed on the property, but then the government responds by asserting either that the plaintiff didn't follow the proper procedure to seek permission, or that the process isn't done just yet and the government has room to change its mind. There, courts frequently defer to whatever the government says the law or its own procedures require or even allow. Again, this case is a better model, with the court taking an active hand in evaluating for itself, and reaching its own conclusions about what the government did, and what the government's procedures are. 
• We often hear that when dealing with its constituents, government has an obligation to "turn square corners." But this case, in our experience, illustrates the reality. Government very often has its own interests in mind and zealously and aggressively scorched-earths it. It should not take the level of bad faith on exhibit in this case to convince a court that the government is more interested in playing games than it is a fair treatment of its constituents. For more, check our our colleague Deb LaFetra's recent Daily Journal piece, "Encouraging government lawyers to engage in the worst legal shenanigans" ("Playing games with people's constitutional rights is unworthy of our government, and their counsel.").

Be sure to check it out.

With both of the judges in the two-judge panel majority writing concurring opinions, and with a strong dissent, we don't anticipate that the panel opinion is going to be the final word in this one. Stay tuned.

Health Freedom Defense Fund, Inc. v. Carvalho, No. 22-55908 (9th Cir. June 7, 2024)

Oregon: Statute Of Limitations On Physical Inverse Claim Runs From The Occupation, Even If It Was Permissive

Before we go on, a disclosure: this is one of ours (we filed an amicus brief in support of the property owners).

In Walton v. Newkowin Regional Sanitary Authority, No. S069004 (May 23, 2024), the Oregon Supreme Court held that the six-year state statute of limitations applicable to physical invasion inverse condemnation claims (under both the Oregon and U.S. Constitutions) begins to run at the time of the invasion, and not when subsequent events show that the invasion was adverse to the owner's property rights. 

This case went up the appeals chain after the trial court granted the Authority's motion for summary judgment. The background of the case is that back in the day (1995, although some of us actually remember that far back), the Authority installed two sewer lines on land belonging to the plaintiffs' father. This was done without the owner's permission. Slip op. at 3. 

But three years later, the Authority entered into an agreement with the plaintiffs' father under which the Authority was granted an easement, provided that if the Authority ever required the landowner to connect to the sewer system, the owner could do so for free. "But [the Authority] 'never prepared an easement document' and 'never recorded an easement.'" Id. 

Flash forward to 2014. By now, father was no longer the owner, and the kids had it. The Authority informed them that their septic system had failed and "they needed to connect to the sewer system." Id. No sweat they thought, the Authority agreed with dad that if required, it would be a free hook up. Well you guessed it, after the kids asked the Authority, it said no. Slip op. at 4.

Next stop (2017): an Oregon trial court on state and federal inverse claims (the kids did not assert a breach of contract claim). They alleged that the Authority installed the sewer lines without acquiring an easement by agreement or by eminent domain, and sought just compensation. What about the fact that the physical invasion was in 1995, well beyond any statute of limitations? The kids asserted that a state statute cannot limit the right to seek compensation for a taking. "In other words, plaintiffs asserted that their claim could not be subject to a statute of limitations." Slip op. at 5.

The Authority responded by agreeing that it installed its sewer lines in 1995 without the owner's permission, but denied that it ever agreed with father for a free hook up if later required. And if there was an oral agreement, it wasn't in writing so therefore could not be enforced (statute of frauds). And yeah, the inverse claim was subject to Oregon's six-year statute of limitations for "waste or trespass upon or for interference with or injury to any interest of another in real property," and the SOL long ago ran, with the lawsuit window opening when the Authority installed the sewage lines in 1995. Slip op. at 6. It sought, and the trial court granted, a motion for summary judgment "on the ground that plaintiffs' inverse condemnation claim was untimely." Id. The court of appeals affirmed. 

After some background on inverse condemnation doctrine (both Oregon and federal - see pages 9-17), the court noted this is a physical and not a regulatory takings claim. It reviewed and rejected each of the kids' arguments that the six-year SOL did not stand in the way of the 2017 complaint.

First, the court rejected the argument that just compensation claims generally are beyond the reach of a legislature's ability to place a time limit on them. Yes, it is a constitutional obligation to provide just compensation when property is taken, but the U.S. Supreme Court and other state courts have at least implicitly applied legislative time limits to compensation claims. See slip op. at 18. Statutes of limitations are part of the "processes for obtaining such compensation," and must be complied with. Slip op. at 21.

Second, the court rejected the argument that physical takings claims cannot be subject to time limits. Nope, these are just a subspecies of just comp claims noted above.

Third, the court rejected the argument that the trigger for the statute beginning to run is not the physical occupation, but when the government refuses to provide compensation. The kids argued that merely taking property is not unconstitutional, and as the U.S. Supreme Court has emphasized, the bad act is the failure to provide just compensation. If that's so, the statute didn't begin to run until the Authority denied that it owed anything, which didn't occur until 2014. Not so, held the court. The SOL starts to run when the aggrieved party can sue on it (noting that federal law puts it as when the cause of action is complete and present). Slip op. at 26. And owners can bring inverse claims "when the physical occupation occurs." Id. The court differentiated between Oregon law (which says that it is ok to take and not pay, as long as there's a subsequent process available for the owner to obtain compensation), and federal law says the same thing (but in a different way). 

The court rejected the kids' argument that Knick suggests otherwise, concluding that the U.S. Supreme Court has concluded that owners can't stop takings merely because compensation isn't provided contemporaneously. "Therefore, the Court continued, as long as post-taking compensation is available, prospectively preventing the government from committing the violation in the first place is unwarranted." Slip op. at 30 (citing Knick, 588 U.S. at 202). Compensation is a remedy for a taking, not a condition precedent.

Having rejected each of the owner's arguments, the court had little difficulty holding that the statute started to run when the Authority placed its sewer lines in 1995. That's when "plaintiffs' father could have initiated a takings claim." Slip op. at 34.

But what about that (alleged) oral agreement that father said he entered into with the Authority? Even assuming there was such an agreement, it only mattered if the agreement "somehow tolled the running of the limitations period." Id. But, the court concluded, "the plaintiffs have not made a tolling argument." Id. Moreover, even if there were such an agreement for a free hook up, the occupation by the Authority was permissive, and the remedy for the Authority breaching the agreement is in contract, not takings. Slip op. at 36 ("The [owner's] concern related to the breach of an agreement; it was not a claim that his property had been taken without his consent. Consequently, he needed to bring a contract or quasi-contract claim, not an inverse condemnation claim.").

We'll wrap this post up with this, from our amicus brief:

The Court of Appeals’ categorical rule has resulted in an absurdity: the only timely physical takings claim the Waltons could have asserted must have been filed at a time when they believed the Authority’s sewer line was on their property with their permission. They obviously did not know at that time that, decades later, the Authority would assert that the free hook-up agreement never existed. The Court of Appeals’ rule would require the Waltons to have brought their physical invasion takings claim in the early 2000’s, long before they even sought to connect to the Authority’s sewer line.

As we've noted previously, statutes of limitations cases can be difficult if not impossible to navigate for property owners. First, if an owner doesn't sue early and often, she is subject to government claims that she waited too long. But if the owner sues at what appears to be the first opportunity, she is very frequently met with government's claim that it is too early to sue because the claim isn't fully developed yet (ripeness). In some cases, the government actually argues that the lawsuit is both too early and too late. And courts eager to get rid of these cases are mostly just fine with it. 

Walton v. Neskowin Regional Sanitary Authority, No. S069004 (Or. May 23, 2024)

CA2: If You Want To Be A Land Use Player, You Gotta Play (And That Means Keep On Trying - Without Hitching Rides)!

This is one we've been meaning to post for a while, but something else always seemed to intervene.

In BMG Monroe I, LLC v. Village of Monroe, No. 22-1047 (Feb. 16, 2024), the U.S. Court of Appeals for the Second Circuit affirmed the dismissal of a statutory and constitutional challenge to the Village's .

The court did so on the basis of the surviving part of the Williamson County ripeness requirement, that the government has taken a definitive position on whether it will allow some development of the plaintiff's land under the challenged regulations.

BMG wanted to build 181 homes, so it developed plans for a mix of uses across several parcels, and development of related infrastructure like roads and a community center. This "did not conform to the zoning codes of the Village and Town." Slip op. at 4. The Village and Town were ok with the proposal, however, provided BMG "satisfied certain conditions" such as the look and feel of the buildings, and other architectural style points. Slip op. at 6. Conditional use approvals followed. Eventually, all looked good and the Village and Town granted conditional final approvals.

But when BMG submitted applications for the building permits on several of its lots, the building inspector balked, asserting the architecture and design were off and not what the conditions required. Permits denied. BMG chased administrative appeals to the Zoning Board of Appeals for some -- but not all -- of the lots. The ZBA eventually denied the filed appeals, concluding that indeed, the construction plans were not in conformity with the conditions on those lots.

Having exhausted its administrative remedies on some but not all of the lots, BMG sued. There wasn't a takings claim (BMG's claims included section 1983, Fair Housing Act, and equal protection), but the district court nonetheless applied Williamson County to dismiss the complaint as unripe.

The Second Circuit affirmed. BMG had not received the Village's "final decision" denying development. But wait, you say...I thought that you said that BMG lost the ZBA appeal? That's usually enough, isn't it? Yes, it did do that, but it didn't chase an appeal on all of the lots. Thus, "BMG's failure to obtain a decision from the ZBA 'leaves undetermined the permitted use of the property in question[.]'" Slip op. at 12 (citations omitted). 

BMG responded: the reason we didn't chase a ZBA appeal on those other lots was that doing so would have been futile. And we did get final approvals and ZBA denials on the other parcels in the group, so isn't that enough? No, according to the Second Circuit, rejecting the argument that "[i]n essence, BMG argues that its otherwise-unripe claims relating to Lots 1, 2, and 3 can hitch a ride on the ripeness of its claims relating to Lots 45 and 46." Slip op. at 13. 

And it didn't matter anyway because even those lots on which BMG chased and lost its ZBA appeals are not ripe because (you guessed it), BMG didn't also seek a variance. Slip op. at 14. Apparently, the Second Circuit sees a variance as some kind of super appeal after ZBA denial. And didn't BMG already get a "variance" (also known as a conditional  use permit)?

But that wasn't enough:

We conclude that after the ZBA affirmed the Village Planning Board’s finding that BMG’s construction plans did not comply with previously agreed-upon conditions, BMG was then required to “submit[] at least one meaningful application for a variance” to the Village Planning Board or ZBA to see whether it could apply clustering techniques in the multi-family district while using the new rear elevation, roof pitch, and siding materials.5 See id. Put simply, the SEQRA Findings provided the terms BMG had to abide by in order to depart from the normally applicable land-use restrictions in the Town and Village. As a result, if BMG wished to alter those conditions, it first had to seek another variance before proceeding to federal court. Cf. Southview Assocs., Ltd. v. Bongartz, 980 F.2d 84, 98–99 (2d Cir. 1992) (holding that, even where “the Board ha[d] denied[] . . . one application,” developer still faced burden of establishing that “submission of another application would be futile” (emphasis added)).

Slip op. at 17.

And finally, didn't Pakdel change the ripeness/futility standards? Not at all, according to the Second Circuit. See slip op. at 19. The more things change, the more they stay the same, no?

What's that old adage? If at first you don't succeed, try and try again? We know that in land use, that means as long as the government says it is willing to "clarify" or "change" its decision (something it almost always asserts it is able and willing to do), a court will very likely never hold it to task. Planning authorities know this, and as a consequence are hardwired to almost never say no, and only "no, but..." or "maybe." 

Until the Supreme Court wakes up to this dynamic, nothing is likely to change.

BMG Monroe I, LLC v. Village of Monroe, No. 22-1047 (2d Cir. Feb. 16, 2024)

In Devillier v. Texas, The Winner Takes It All (Part I)

The winner takes it all
The loser's standing small
Beside the victory
That's her destiny

Note: this is the first of a short series of posts on the U.S. Supreme Court's recent decision in Devillier v. Texas.

In Part II, we'll cover the case, the procedural path that Texas dragged everyone through, only to abandon it at the Supreme  Court), and what the Court actually decided, if anything,

Three Common Questions for Lawyers

In the classroom, I often ask students to use their intuition to guess the three most common questions that lawyers almost always get from potential clients. Put yourself in a client's shoes: what would you want to know?

The students mostly get it right. "What's this going to cost?" Check. "How long will this take?" Check. And perhaps most obviously, "What are my chances of winning?"

That last question -- am I going to win? -- is perhaps the most common. And when they ask, I'm thinking that that most clients don't have an overly nuanced approach to what it means to "win" a case: I get what I want; I keep on fighting; I recover just compensation; I get vindication from the justice system; I lose but get my day in court, even.

It doesn't seem all that difficult to figure out what a "win" looks like, does it?

Deviller v. Texas II: the Afterfight

So you might think that after the U.S. Supreme Court issued a unanimous opinion in Devillier v. Texas (that's 9-0 if anyone is counting), a property rights case we've been following, you'd be able to figure out which party "won" in the Court.

Nope. It turns out that like the post-Oscar afterparties, there's a weird post-opinion afterfight going on between Devillier's lawyers and the Texas Attorney General. Before the ink (ok, toner) was seemingly dry on the opinion, a dispute broke out on social media over who "won" the Supreme Court case after the AG issued a press release and tweeted about what he claimed is Texas's big win:

Texas: We're down for the big win!

Devillier: Not so fast, pard. 

So Who "Won?" (Hint: Devillier)

We really don't want to get bogged down in secondary dispute who won a unanimous Supreme Court decision. After all, the more interesting question in many Supreme Court cases is what the decision means to a wider scope of players than just the parties to the case, and not which litigant can legitimately claim to have won a phase of the litigation.

Besides, we don't think it's that hard to figure out who prevailed. Prior to the Supreme Court rendering its decision, Devillier was facing legal oblivion: the Fifth Circuit had dismissed his lawsuit. As in gone. Bye bye. Get outta here. The Supreme Court undid that (vacated the lower court judgment, in technical terms), and sent the case back down the federal court chain for further proceedings. It may even end up eventually back in state court right where Devillier started. In short, Devillier is back from the brink as if the last few years never happened, and gets to continue his legal pursuit of Texas for just compensation. That sure looks like a "win."

And Devillier's lawsuit will continue mostly in the in way he set it up; yes, it is in federal court (at least for the time being), and not a Texas court where Devillier originally brought it, but (a) if it stays in federal court maybe the federal forum will be more favorable so he might be in an even better position than where he started; (b) the case might eventually go back to state court, which is literally Square 1 for this lawsuit; and (c) the Supreme Court ordered the lower federal courts to allow Devillier to amend his complaint to make it clear he is asserting his federal right to just compensation (but, kinda weirdly, pursuant to a Texas cause of action), a procedure Texas belatedly but ultimately conceded in the Supreme Court, something it had not earlier (more on that later). We'd call that a Devillier "win" also. And any time a property owner can convince all nine Supreme Court Justices reject a government's denial of its obligation to provide just compensation when it has taken property, that seems like a good thing.  

Spin City?

If so, then how could Texas with a straight face claim this was a big win?

On one hand, it could be written off as the very cynical product of political spin. Elected AG's are known as "Aspiring Governors" for a reason. On the other, could Texas legitimately claim that it got what it wanted from the Supreme Court, and that's a "win?" For that, you have to start viewing the litigation like a lawyer and not a normal person. Especially as a lawyer for a defendant. In those cases, it often it isn't about the final outcome of the case as much as it is about damage control, minimizing your losses.

Or (as we suspect here) seeing how long you can slow-walk a procedural strategy and hope the other side eventually bleeds out and gives up, broke and exhausted. And if the owner somehow holds on through years of the procedural nonsense you throw at him, you can then offer up a late-breaking concession and ask the reviewing court to avoid the issue. Legal rope-a-dope.

Maybe the Supreme Court being convinced to not decide in this case (but to save it for the future) whether the Fifth Amendment itself allows owners to sue for compensation when a state takes their property, was enough for Texas to claim a "win."

Our bottom line is this: the more important question than which party won the Supreme Court phase of the litigation was did the Court actually decide anything beyond which party won the Supreme Court phase of the litigation? If so, then what? And what does the Devillier case mean for the future, if anything? So let's shuck this "who won" distraction and focus on what is important, if anything, about the Supreme Court's decision.

* * * *

In our next post, we'll cover the case, the weird procedural path that Texas dragged everyone through (only ultimately to say "nevermind" in the Supreme Court), and what the Court actually decided, if anything.

Devillier v. Texas, No. 22-913 (U.S. Apr. 16, 2023)

$48 Million The Hard Zoning Way: Thanks To NIMBYs And NIMTOOs, Las Vegas Must Pony Up A Lucas Takings Judgment

If there's a money quote in yesterday's opinion by the Supreme Court of Nevada which "wholly affirm[ed] a trial court judgment awarding $48 million in just compensation for Las Vegas's regulatory taking in City of Las Vegas v. 180 Land Co., LLC, No. 24-13605 (Apr. 18, 2024), it might just be this sentence:

Although the City rejected 180 Land's development proposals, its representatives had previously recognized the site's ability to be developed residentially.

Slip op. at 8.

That alone should tell you where this one is ultimately headed. But let's break it down and see how this got there.

Residential PUD Zoning

It started off well for the property owner, who owned land it wanted to use as a golf course, part of a (much) larger 2,200 acre ranch. The city preliminarily approved a request to zone the proposed golf course for residential PUD (planned unit development - which should reveal to you land uses when this went down (1980s)). In 1990, the city was satisfied and the golf course area was zoned R-PD7 (Residential Planned Unit Development).

This being Nevada, the zoning approval meant that the golf course was actually built.

General Plan: Open Space

During the construction, the city adopted a new General Plan which designated the parcel as "Parks/Schools/Recreation/Open Space." But despite the change in the GP, the zoning was not altered. Indeed, in 1986, the city confirmed in a letter that the R-PD7 zoning remained for the golf course. And in 2001, the city adopted another ordinance that "formally rezoned it to R-PD7 on the Official Zoning Map Atlas, and repealed any previous conflicting ordinances." Slip op. at 5.

By 2015, however, the golf course was struggling. "[T]he operator of the golf course informed the then-landowners, Fore Stars, Ltd., that it could not longer make a profit operating the golf course and thereafter terminated the lease in 2016." Id.

Residential Zoning, Residential Development

That same year, an outfit known as "180 Land" acquired the assets of Fore Stars, including the golf course area, and later a fellow named Yohan Lowie acquired ownership. It was time to change the use from a golf course to something more in line with the zoning.

180 Land segmented the 9 parcels of the golf course into four development areas. One of these, a 35-acre parcel, became the focus of the dispute. In 2016, 180 Land sought to develop the site, first by seeking to change the GP designation from Open Space to low-density residential, and then by submitting typical development applications such as a Tentative Map, and site review. City staff recommended approval. While these were in-progress, 180 Land also sought approval of a new Master Development Agreement. Staff was on board with that as well.

Successful Opposition to the Residential Project

Then came the opponents, a "homeowner group" which challenged the city's approval of a separate application for another one of the four former golf course parcels. Next up, the discussion of the 35-acre parcel residential development at a City Council public hearing became "contentious," with "strong public opposition to 180 Land's applications." Slip op.at 7.

The walls came tumbling down:

The City ultimately denied the applications despite the City's planning staff having recommended approval. The City's final decision stated that the denials were "due to significant public opposition to the proposed development, concerns over the impact of the proposed development on surrounding residents, and concerns on piecemeal development of the Master Development Plan area rather than a cohesive plan for the entire area." Despite rejecting the 35-acre application, in part because of concerns over "piecemeal development," the City also rejected the comprehensive Master Development application in August 2017, two months after rejecting the 35-acre application. Also in August 2017, the City rejected applications from 180 Land pending since 2016 for three access points to the golf course acreage from neighboring public streets and to install fencing around two water features on the acreage. The City stated it denied the applications because of "the various public hearings and subsequent debates concerning the development on the subject site" and instructed 180 Land to file an application for a "Major Review" under the City's municipal code. 180 Land did not file any Major Review applications. The City also denied 180 Land's application for a technical drainage study, though Las Vegas Municipal Code (LVMC) 19.16.105 requires such a study before residential development is allowed.

Slip op. at 7-8.

City's Representations

But that wasn't the end of the story. "Although the city rejected 180 Land's development proposals, its representatives had previously recognized the site's ability to be developed residentially." Slip op. at 8. Various city employees and officials confirmed that the city had already approved the residential zoning of the property and under Nevada land use law, zoning is king: if the GP is inconsistent with the zoning, the zoning trumps. 

Inverse Condemnation

Next up, an inverse claim in a Nevada state court. The trial court held that the "hard zoning" was indeed R-PD7, meaning that 180 Land had "as a right" a single-family and multiresidential development. Slip op. at 9. You know what that means: the city could either let 'em build, or condemn. It could not use its police power to deny the "as of right" development. The trial court granted 180 Land multiple summary judgments on liability, and considered valuation evidence of just compensation:

[T]he district court ultimately adopted 180 Land's expert's valuation of the land, $34,135,000, noting that the City did not present any contrary valuations or any other rebuttal evidence and did not depose 180 Land's expert. The district court also granted 180 Land's requests for reimbursement of its property taxes, prejudgment interest, and attorney fees. In doing so, the district court rejected 180 Land's request for a 23-percent prejudgment interest rate, calculating its prejudgment interest award using a prime plus 2-percent rate. The final judgment in favor of 180 Land totaled $48,114,039.30.

Slip op. at 9-10. Both sides appealed. The city sought to overturn the takings judgment, while 180 Land challenged the amount of prejudment interest.

Nevada Supreme Court: a Right to Develop

The Supreme Court described the issue as "whether the site's R-PD7 residential zoning or its PR-OS land designation [on the General Plan] governed 180 Land's ability to develop the property and/or conferred certain rights on 180 Land." Slip op. at 10. When the taking issue is framed that way (as a land usey and not a takings issue), then you can kind of see where this one is going. If the zoning defined 180 Land's property rights, game over. Vested, etc. If the city's argument -- that it could deny "any development applications" inconsistent with the GP designation were accepted, then no property and no taking.

In short, the taking issue turned on the question of whether zoning or the General Plan controlled the use of 180 Land's land. You can read pages 11-12 of the opinion for the details, but the short story is that the court concluded that indeed, zoning is law while the GP is "not a legislative mandate from which no leave can be taken." Slip op. at 11.

Plan/Zone Consistency?

What about the rubric in Nevada land use law that zoning must be consistent with a general plan? The court was not convinced because "[t]he problem with applying the consistency requirement in this case is that the substantial evidence demonstrates that the R-PD7 zoning predated the PR-OS land designation." Slip op. at 12. Zoning: 1986. GP: 1992. And the court also noted that the ordinance adopting the PR-OS GP designation expressly noted that the GP designation didn't modify or invalidate the existing zoning.

Murr Denominator Parcel

Having determined that 180 Land had a vested right to develop in accordance with the residential zoning, the court held that the city's denial of its residential development applications was a taking. The court identified the property interest: the 25-acre parcel. It rejected the city's claim that Murr v. Wisconsin required the denominator to be the entire 9-parcel former golf course.

The court applied the multi-factor Murr standard to conclude that no, the property here was only the 35-acre residentially-zoned parcel, not the other of 180 Land's holdings. The court also rejected the city's claim that the case wasn't even ripe because 180 Land submitted "only one development application[.]" Slip op. at 21. To the court, that one denied application was enough, and "any further attempts to apply for development by 180 Land would have been futile[.]" Id.

Lucas Wipeout

On the merits, we urge you to read pages 24-26 of the opinion, where the court analyzes the case to conclude that this worked a "per se regulatory taking." In short, a Lucas economic wipeout. This passage is worth quoting at length:

The City's denials of 180 Land's applications and the discussion of those applications at various city council meetings show no meaningful indication that the City would allow any development on the 35 acres. As noted above, the City's denials stated it was rejecting the applications based on strong public opposition and that 180 Land had not provided a cohesive plan for the entire golf course acreage. But the City provided no regulatory basis for the denials13 that would allow 180 Land to seek a variance or submit an amended application that would resolve any such issues. The City similarly rejected 180 Land's Master Plan application that provided a cohesive plan for the golf course acreage. That these denials occurred despite the City's planning office working with 180 Land on at least one of the proposals and repeatedly recommending that the City approve the applications underscores an unwillingness to allow any development. And the City did not provide 180 Land with any viable alternatives for it to reap economic benefit from the 35 acres when denying its applications. In short, the City's actions demonstrate that it would not approve any development on the 35 acres. Further, we discern no error in the district court adopting 180 Land's expert's opinion that, without the ability to develop the 35 acres, it had no economic value

Slip op. at 25-26.

Just Compensation

The court next considered the city's argument that the trial court got the just compensation wrong. No abuse of discretion, so judgment affirmed. The most interesting part of this part of the opinion in our opinion is on pages 28-29, where the court noted that the landowner met its burden of introducing relevant valuation evidence (an expert who opined on the land's value in its highest and best use). And, stunningly, that the city
"presented no contrary evidence[,]" and didn't even depose 180 Land's expert. Indeed, it made no effort to rebut the expert report.  Slip op. at 29. Whoa.

And what of the landowner's appeal on the amount of prejudment interest? No go because the rate it sought would not merely make up for the delay in payment, but would "reimburse it for the purported profit it lose had it been able to develop the land." Slip op. at 32.

The opinion ended by summing up:

When a governmental agency acts in a manner that removes all the economic value from privately owned land, just compensation must be paid. Here, the City's actions demonstrated a refusal to allow any development on the 35-acre parcel owned by 180 Land such that the parcel no longer had any economic value. The district court therefore did not err in finding that a taking occurred. Nor did the district court err in its just compensation award, as it based that decision on uncontroverted evidence from a duly admitted expert witness.

Slip op. at 32.

There it is.

Congratulations are in order for our Nevada colleague Kermitt Waters and his firm.

City of Las Vegas v. 180 Land Co., LLC, No. 24-13605 (Nev. Apr. 18, 2024)

New Cert Petition: Denial Of Development Under Existing Law Enough To Ripen A Takings Claim

Here's our latest, this cert petition, another one asking whether a property owner's regulatory takings claim is ripe for judicial review.

This is one of ours, so we won't be commenting in depth other than to say that it doesn't seem like you should have to seek permission under Futurelaw in order to ripen a claim.

The Question Presented (and the petition itself) set out the issues, and our take on them:

The City of South Burlington, Vermont, established “Habitat Blocks” where all development is banned to preserve open space. It enacted an “interim” land use ordinance that restricted development between 2018 and 2022 while it contemplated the location of its Habitat Blocks. During that period 835 Hinesburg Road, LLC, submitted a development proposal for the construction of commercial and light industrial buildings on its 113.8-acre parcel of undeveloped land, which complied with all elements of the interim ordinance. The City formally rejected the plan as intruding partially into potential future Habitat Blocks. 835 Hinesburg filed a federal lawsuit claiming the City’s rejection effected an unconstitutional taking without compensation. The district court dismissed the takings claim as unripe because 835 Hinesburg did not submit a second development proposal under subsequently adopted regulations that included the Habitat Blocks. The Second Circuit affirmed.

The question presented is:

Whether a takings claim is ripe when a city makes a final decision under existing ordinances denying a land use permit, or whether a property owner is required to submit subsequent development proposals for consideration under future or later-adopted regulations to ripen the claim?

Follow along here, or on the Court's docket.

Petition for a Writ of Certiorari, 835 Hinesburg Road, LLC v. City of South Burlington, No. 23-2045 (U.S. M...

Too Soon For CA5 To Figure Out Whether City Demolishing Property For Code Violations Is A Taking

In Rhone v. City of Texas City, No. 22-40551 (Feb. 14, 2024), the U.S. Court of Appeals for the Fifth Circuit held that a municipality's conclusion that Rhone's apartment building had not been properly maintained, and a subsequent municipal court demolition order, might be a taking ... or it might not be.

We won't get too far into the facts, except to say that Rhone argued that the city had it out for him, and that the municipal court judge who issued the demolition order was in a contractual relationship with the city by which the judge had to submit for approval all of the court's decisions to the city attorney (the very party pressing the nuisance claims against Rhone). Weird, but apparently a product of Texas law. Short story, according tot the court: "[a]ll of this, facially at least, is a declaration of a lack of independence of judge and city." Slip op. at 12. Yowza!

The district court deemed any pecuniary interest the judge may have had as "de minimis," but the Fifth Circuit noted that "[t]here is evidence that the City Attorney has final authority on what the order on his own petition for abatement would say." Slip op. at 13. Thus, the court ordered a "limited remand" to the district court for a determination of whether the municipal court's demolition order was or was not the product of independent decision-making. If it was, Rhone's constitutional claims would not survive. But "[i]f that premise changes, this opinion will as well." Slip op. at 13. In other words, if the judge's decisions were too tightly controlled by the city -- one of the parties to the very litigation the judge was deciding -- then there might be something there.

The court also rejected the city's argument that the demolition of the building rendered the takings claim moot. "Importantly, demolition of the apartment buildings does not eliminate a takings claims; indeed, it may create one. See Knick v. Twp. of Scott, Pa., 139 S. Ct. 2162, 2167 (2019). This right allows for the property owner to have “some way to obtain compensation after” the government’s unconstitutional actions. Id. at 2168." Slip op. at 7.

So what did the court say about Rhone's takings claim? Jump forward to page 13 for this:

Our limited remand will keep open the issue of whether the Municipal Court’s determination that the property was a nuisance and allowed demolition was not the result of sufficiently independent decision-making. The remainder of the opinion is premised on the Municipal Court’s decision’s being a valid one. If that premise changes, this opinion will as well.

Rhone challenges the district court’s dismissal of his Fifth Amendment takings claim, saying there are fact issues requiring a trial. A property owner may bring a Fifth Amendment takings claim under Section 1983 as soon as the government takes his property without just compensation. Knick, 139 S. Ct. at 2170. Rhone maintains he was subjected to a taking without compensation by the City’s imposing of unnecessary and expensive repair obligations before Rhone would be allowed to use his property; by requiring he keep the property vacant; and by interfering with his efforts to repair, sell, or otherwise address the identified deficiencies in the property. This claim relies on the City’s actions prior to the Municipal Court’s order of abatement that allowed the property’s demolition. Rhone’s legal argument includes that these compliance costs were invalid under the doctrine of unconstitutional conditions. See Koontz v. St. Johns River Water Mgmt. Dist., 570 U.S. 595 (2013).

Slip op. at 13-14.

The court concluded that what Rhone was pressing was not really an unconstitutional conditions takings claim (because, after all, the city wasn't really forcing him to choose between two rights, but was merely telling him to stop using his property as a nuisance). But the court noted, that "[t]o be fair, Rhone is not disputing that." In short, the essence of his claim is that the city's safety officials who concluded his property was a nuisance should not have been given unreviewable authority to make that determination. See slip op. at 15.

In the end, this doesn't really look all that much like a takings claim after all does it? On that, the opinion sort of wanders away into other civil rights territory, without a clear statement of what happens to the takings claim after remand. Check out pages 15 and 16 if you doubt us. We think the takings claim survives, based on the court's earlier statement that "[i]f that premise [the judge/city relationship] changes, this opinion will as well." Slip op. at 13. But maybe not.

The common law litigation process was all about narrowing, winnowing, and processing claims by forcing them into predefined forms with their own remedies. Did that occur here? Hard to say. 

Rhone v. City of Texas City, No. 22-40551 (5th Cir. Feb. 14, 2024)

Pass A Good Time: Our Report From The 41st ALI-CLE Eminent Domain & Land Valuation Litigation Conference, Feb 1-3, 2024, New Orleans

When it comes to the longstanding ALI-CLE American Law Institute-CLE Eminent Domain and Land Valuation Litigation Conferences, we're always ready to go. You know that. But this year's version -- the 41st -- was buzzing like no other in recent memory.

Maybe it was the New Orleans venue with its atmo, food, and music for our after-class activities, or even the timing (the second-to-last week on the Mardi Gras parade season, and our conference hotel was right on the routes). It might have been the nice weather (oh, it rained buckets one evening, but there wasn't an ice storm like we experienced in Austin in 2023). Or maybe it was the capacity crowd, and new topics and speakers on the agenda. Or maybe it was just the prospect of seeing our friends and colleagues again after a year.

Here's a photo essay of some of the Conference highlights.

And if you missed out, the webcast was recorded and is available for viewing. Or, better yet, hold on your calendar January 30 through February 1, 2025 for the 42d Conference, to be held at the Westin Bayside San Diego.

Excitement this way...

The view from the podium.
Say "hello" to our opening plenary session in wide-angle.

Prepping the space.
The finished stage that Conference attendees
see isn't how the room starts off.
It takes a lot of work by the ALI-CLE staff
to get the place camera-ready.

The live webcasting of the sessions also takes a lot of
set-up and a ton of equipment. This is just some of it. 

Here's more. 

The badges were arranged on the table with care...

...in trust that our faculty and registrants would soon be there.

No conference would be complete without swag.
Here is but a sampling.

As always, a huge thank you to our generous sponsors.
Without your support, this Conference would not be as
good as it is, year after year.


The Conference site was right on the routes of several parades.
It was difficult to keep focusing on severance damages and larger parcel
when the music and excitement was just outside.
But we tried.


The opening plenary session -- on the U.S. Supreme Court's
big takings case -- got us off to a solid start.


Thanks to Christina Martin and Steve Silva for speaking
on Tyler v Hennepin County.

The view from the podium as Amy Boulris speaks about the most
significant eminent domain decisions of 2023.

The speakers are a mix of practicing lawyers, judges, other eminent domain
professionals, and legal academics. Here, two property scholars --
Timothy Harris and Jessica Asbridge --
discuss how state property law and state courts
can drive the constitutional issues.

Kinnon Williams, Esq. and Christina Thoreson, SR-WA, MAI, CRE 
present on "Valuation of Wasting Assets."

Lawprof Emilio Longoria and attorney Tony Francois
on "What Condemnation Lawyers Need to Understand
About the Clean Water Act After Sackett"
(hint: it goes to highest and best use).

Matthew Ackerman, Marianna Baggett, and Kenneth Haywood
on "The Pitfalls of Objectively Measured Just Compensation:
When Market Value Isn't Enough."

It was not all work and no play.
Again, a big thanks to our generous sponsors.

Our speakers take questions, of course.
We solicit them the old-fashioned way (thanks, James Masterman).

William and Mary Law School Professor
Emerita Lynda Butler (and her former student, North Carolina's
Jeremy Hopkins" discuss property rights in an age of coastal retreat.

Luis Gallardo-Rivera, Dana Berliner, and (off-camera)
Sophia Holley on "Proving and Defending Pretext,
Public Use, and Necessity."

James Masterman and Martye Kendrick on "Preparing Your Witness
to Overcome Obstacles to Highest and Best Use."

Jeff McCoy, Robert McNamara, and Kristen Renfro on
"Getting to Federal Court and Staying There:
Navigating Procedural Mazes in Federal Takings Claims."

Sean Metherell and Nathan Farris zero in on
"How to Win a Future Highest and Best Use Claim: Proving Reasonable
Probability of Rezoning and Other Issues."

Michael Berger is Watching You:
SCOTUS Property Rights Maven Michael Berger zooms in with his
annual "Regulatory Takings Update."

We always hold a spot for Jim Burling on Saturday.
Why? Because his tours-de-force always are interesting
and put people in seats, even on a Saturday morning.

More Big Michael.
Here, sharing his memories of Professor Gideon Kanner.

See you in San Diego!
January 30 - February 1, 2025
Westin San Diego Bayside

Peace Out: CA9 OK's Pre-Enforcement Challenge To Rent Control Statute

Check out the U.S. Court of Appeals' opinion in Peace Ranch, LLC v. Bonta, No. 22-16063 (Feb. 13, 2024), where the court concluded that the owner of a mobilehome park could bring a federal court challenge to a California statute, even before the state applied the statute and enforced it.

There's a mobilehome park in Southern California -- Rancho La Paz -- that straddles the line between two separate municipalities, Anaheim and Fullerton. When the owner of the park upped the rent, the municipalities undertook efforts to impose a form of rent control. But those efforts ultimately failed.

Not to be outdone, the state representative from the area pushed for, and got adopted a state statute that seems curiously tailored to cover only Rancho La Paz: certain "qualified" mobilehome parks can only raise the rent a certain amount. The definition of a "qualified" park in the statute is limited to those parks which are within two or more incorporated cites. Gee, what a coincidence!

The owners sued in federal court, alleging a host of constitutional violations, including takings. The district court dismissed, concluding that the statute does not apply to Rancho La Paz because it is not a "qualified" mobilehome park. Hold on, how so? Turns out that the owner of the park alleges that it is not a single park split between two municipalities, but that it is instead two separate parks -- one in Anaheim and one in Fullerton. But what was important, the owner asserted, was that the State believes that the property is a single park that is a "qualified" park and therefore subject to the state's rent controlled statute. The court concluded that it was going to accept the owner's pleaded facts as true, and thus held that there was no "realistic danger of sustaining an injury" by the state's enforcement. 

The owner tried to amend around this, emphasizing that its injury was due to the state wrongly believing that Rancho La Paz is subject to the statute. But to no avail, and the district court dismissed with prejudice. In short, because the owner continued to maintain that it was not covered by the statute, it could only sue if and when the state moved to actually enforce the law. Until then, no claim.

The Ninth Circuit reversed. It focused on the question as one of pre-enforcement standing. Can a plaintiff bring an action challenging a law when the government has not yet formally applied that law to the plaintiff? As the court noted:

Pre-enforcement injury is a special subset of injury-in-fact. Typically, plaintiffs must allege an injury at the time of filing. For pre-enforcement plaintiffs, the injury is the  anticipated enforcement of the challenged statute in the future. One need not violate a criminal law and risk prosecution in order to challenge the law’s constitutionality.

Slip op. at 8.

The entire opinion is worth your time to read. But here's some highlights. First, a plaintiff "need not plan to break the law." Slip op. at 11. Second, the court noted that resolving a standing question does not require "mini litigation of the claims." The court must take as true the allegations in the complaint. Slip op. at 12. Third, the Ranch's conduct need not be definitively within the statutory proscription, merely "arguably" covered. The court noted:

In an effort to preserve future arguments, both parties dance around whether Rancho La Paz is a single mobilehome park straddling two cities or two mobilehome parks, one in each city. Hedging its bets, Peace Ranch alternatively claims that it is a single park (and thus is subject to AB 978) or two parks (and thus escapes the confines of AB 978). The amended complaint describes Rancho La Paz as a “park straddl[ing] two cities” and also alleges that “Peace Ranch believes [Rancho La Paz] is actually two separate parks (one in Anaheim and the other in Fullerton).” In its opening brief, Peace Ranch explains that these allegations “preserve an alternative argument for a future enforcement or other proceeding.” For its part, Peace Ranch is clear on one point—it wants to raise the rents.

The Attorney General maintains that Peace Ranch’s allegation of two parks destroys its standing. There can be, the argument goes, no pre-enforcement standing if the statute does not apply to Peace Ranch.

Slip op. at 13.

As the court notes, there's a logical trap there. The owner ultimately argues that it isn't covered by the statute, but claiming that is the very thing that the state pointed to as saying "ah hah, no standing." Addressing this, the court noted that there's no need to resolve this question at this stage -- for indeed, this is the core merits question:

We can avoid this pickle—an inquiry that seems to unavoidably tangle standing with the merits. One purpose of pre-enforcement standing is to ensure that no law is practically unchallengeable. The risk of being sued by the state will deter many plaintiffs from testing their luck. Thus, the relevant question is whether Peace Ranch plausibly alleged that it refrained from raising rents because of the Attorney General’s interpretation of AB 978.

Slip op. at 14.

Read that again: "plausibly alleged."

That, the court held, coupled with the "substantial threat of enforcement" is enough. Has the government disavowed enforcement? If not, that should be enough. Slip op. at 15. "Here, the Attorney General not only refuses to disavow its intent to enforce but also admits that the law targets Peach Ranch." Id.

This case reminds us of another recent Ninth Circuit decision, Iten v. County of Los Angeles, where the issue was not presented as one of pre-enforcement standing, but plain-old standing.

Our question is this: why doesn't the court's approach here also rule the day when it comes to whether a regulatory takings claim is ripe? Remember that in many regulatory takings claims, the government claims it has not made a "final decision" applying its land use restrictions to the plaintiff's property. We might allow you to build, the government frequently claims. You have to ask us -- and keep asking us -- before any court can say that our actions are a taking.

To us, the court's analysis here -- looking at the facts as alleged in the complaint, the government's disavowal, vel non, of enforcement, and a clear line between pleadings and the ultimate merits question -- should be more widely applied.

Peace Ranch, LLC v. Bonta, No. 22-16063 (9th Cir. Feb. 13, 2024)

No State Takings Problem In Amending Public Pension Plan

Illinois adopted a statute that tweaked public pensions:

On January 1, 2020, Public Act 101-610 became effective and amended, in pertinent part, portions of the pension code to consolidate all applicable local police and firefighter pension fund assets into two statewide pension investment funds, one for police and the other for firefighters. Pursuant to the Act, the local pension funds were required to transfer custody and investment responsibility for their fund assets to the respective statewide funds, which are now tasked with collectively investing and administering the pooled assets. The Act provided a transition period that ended on June 30, 2022, for the transfer of securities, assets, and the investment function from the local funds to the statewide investment funds.

There's more detail on the statute in the Illinois Supreme Court's opinion in Arlington Heights Police Pension Fund v. Pritzker, No. 129471 (Jan. 19, 2024), but we'll leave those details to you. Suffice it to say that the public unions did not appreciate these amendments, and sued in an Illinois court, alleging (inter alia) that these tweaks resulted in an Illinois-law taking. Oh, there were other claims, but you know we're going to focus on the takings stuff.

The plaintiffs argued:

Plaintiffs’ complaint alleged that the Act diminishes and impairs their pension benefits because, (1) prior to the Act, the local funds could “exclusively manage and control their investment expenditures and income”; (2) their “voting power and thereby an effective say in the selection of investment managers, investments, risks, rates of return, costs and expenses” was diluted by the participation of members of other local funds; and (3) the local funds must bear the costs associated with the Act’s transition process, including repayment of any IFA transition loans.

Slip op. at 4.

The trial court didn't buy it because the Illinois takings clause only governs real property (really!), and thus the plaintiffs had no takings clause property at stake. The appellate court agreed on the result (if not the reasoning), holding that "because plaintiffs have no property right in any particular assets or level of funding and are entitled only to present or future payments from the funds, they could not establish the private property requirement for their takings claim." Slip op. at 5.

The Illinois Supreme Court also agreed. Skip forward to page 10 to get to the takings stuff. Thankfully, the court didn't adopt the trial court's reasoning that property only includes real property. Instead, the court held that the plaintiffs have no property right in the source of funding for their pensions:

As the appellate court correctly concluded, the Act does not take any of plaintiffs’ private property. As participants in a defined benefit plan, they have a right to receive their promised benefits but do not somehow have a private property right in the source of funding for those payments. Plaintiffs claim that the Act requires them to fully transfer ownership of their private property, comprising the securities and other fund assets. The Act does not operate in that manner. It simply changes the control and management of the local funds’ assets from one government-created pension fund to another type of government-created pension fund. As defendants assert, although plaintiffs have a constitutional right to receive the benefit payments promised to them, which the Act does not change, they do not have a property right to any particular level of assets used to pay those benefits or in the way those assets are held or invested.

¶ 37 Plaintiffs have failed to identify any property right under Illinois law that is affected by the 2020 amendment to the Pension Code. It is undisputed that the Act does not impact the pension payments that plaintiffs are entitled to receive. Additionally, as defendants recognize, plaintiffs’ takings claim must also fail because even if they had a property right in the local funds’ assets, which they do not, the Act would not constitute a taking of that property for the government’s use. The Act simply changes how local fund assets are managed and invested without affecting the ultimate use of those assets to pay the benefits of local fund members.

Slip op. at 10-11.

And you know what "no property" means - no taking.

Arlington Heights Police Pension Fund v. Pritzker, No. 129471 (Ill. Jan. 19, 2024)

No FOMO: There's Still Room For You To Join Us In New Orleans Feb 1-3, 2024 For The 41st ALI-CLE Eminent Domain & Land Valuation Litigation Conference

Don't miss out!

We promise: this is the last time we're going to try to entice you to the upcoming ALI-CLE Eminent Domain & Land Valuation Litigation Conference in New Orleans. We are getting close to capacity, but there is still room. In recent years, we have standing room only in the Conference halls, and have sold out the hotel block. After all, this is a pretty niche area of law. So what gives?

When we were in Austin last year, we thought it might be nice to try and answer that question. We asked Conference participants why they come, year-after-year (and in Austin, despite massive travel disruptions). Yes, it is the various venues (Nashville, Austin, Scottsdale, Palm Springs, to name a few recent locations), and yes, it is the excellent and useful programming.

But as we suspected it is more than that. As the above video notes, the consistent response from our participants about why the attend is the participants. The faculty and other attendees, the vendors. The collegiality, the chance to renew long-standing friendships, and especially the chance to make new friends and colleagues who share our passion for this area of law. The welcoming environment, and our desire to have lawyers and other professionals new to this area of law or new to the Bar feel at home and welcomed.

We have also made a big effort in the last few years to include a range of professionals from various perspectives, including lawyers, legal academics, jurists, appraisers and MAIs, planners, right of way and relocation experts, and jury and trial consultants. Family members also welcome (there are a lot of "adjacent" social and networking events, and families are welcome as long as they don't mind a lot of "shop talk"). Our program is a mix of practical and substantive sessions.

We also have a special track on the first day of the Conference designed as a crash course in Eminent Domain law ("Condemnation 101"), which is a good place for an overview and introduction to the practice, or as a refresher course for those with more time under your belt.

In short, we try and make the Conference not just a place to learn the latest in eminent domain and related topics, but somewhere you can return to each year, and feel welcome.

So if you have not attended before, give us a try! We'd love to see you in New Orleans in just a few months. Registration is still open. Sign up now, and don't miss out.

CA5: Government Should Not Send You On A Wild Goose Chase Though Its Own Procedures: "It was the regulatory equivalent of Romeo sending Mercutio on a wild goose chase—and then admitting there never was a goose while denying he even suggested the chase."

What is a case about the U.S. Court of Appeals for the Fifth Circuit's en banc opinion on the FDA's approval procedures for e-cigarettes, Wages and White Lion Invs, L.L.C. v. Food & Drug Admin., No. 21-60766 (Jan. 3, 2023), doing here?

We consider it worthy of your time and post it here because of the way the majority addresses the FDA's central argument: that even though the public took the FDA's public instructions (including statements on its website) at face value, these procedures meant nothing. 

Government shouldn't play such games, the court concluded. It can't go back on what it holds out to the public, especially as a later litigation posture. See, e.g., slip op.at 20 ("In the MDO's, however, FDA explicitly stated that its instructions were all for naught."). Government "about-face[s]" are not appreciated. Slip op. at 28. We rightfully expect more from our government. 

You land users should read this, and see if sounds familiar:

Over several years, the Food and Drug Administration ("FDA") sent manufacturers of flavored e-cigarette products on a wild goose chase.

First, the agency gave manufacturers detailed instructions for what information federal regulators needed to approve e-cigarette products. Just as importantly, FDA gave manufacturers specific instructions on what regulators did not need. The agency said manufacturers' marketing plans would be "critical" to the success of their applications. And the agency promulgated hundreds of pages of guidance documents, hosted public meetings, and posted formal presentations to its website—all with the (false) promise that a flavored-product manufacturer could, at least in theory, satisfy FDA's instructions. The regulated manufacturers dutifully spent untold millions conforming their behavior and their applications to FDA's say-so.

Then, months after receiving hundreds of thousands of applications predicated on its instructions, FDA turned around, pretended it never gave anyone any instructions about anything, imposed new testing requirements without any notice, and denied all one million flavored e-cigarette applications for failing to predict the agency's volte face. Worse, after telling manufacturers that their marketing plans were "critical" to their applications, FDA candidly admitted that it did not read a single word of the one million plans. Then FDA denied that its voluminous guidance documents and years-long instructional processes meant anything. Why? Because, the agency said, it always reserved the implied power to ignore every instruction it ever gave and to require the very studies it said could be omitted, along with the secret power to not even read the marketing plans it previously said were "critical." It was the regulatory equivalent of Romeo sending Mercutio on a wild goose chase—and then admitting there never was a goose while denying he even suggested the chase. Cf. William Shakespeare, Romeo and Juliet act 2, sc. 4.

FDA justifies its behavior with two principal arguments. First, FDA argues that its years' worth of regulatory guidance was not worth the paper it was printed on because it was hedged with cautious qualifiers and never guaranteed that any particular submission would be granted. Second, and most disturbingly, FDA argues that its capriciousness should be forgiven as harmless because the agency promises to deny petitioners' applications even if we remand to make the agency follow the law.

Today we reject both propositions. As the Supreme Court recently reminded us: "If men must turn square corners when they deal with the government, it cannot be too much to expect the government to turn square corners when it deals with them." Niz-Chavez v. Garland, 593 U.S. 155, 172 (2021). No principle is more important when considering how the unelected administrators of the Fourth Branch of Government treat the American people. And FDA's regulatory switcheroos in this case bear no resemblance to square corners. As for the agency's harmless-error argument, the Supreme Court recently, unanimously, and summarily rejected it. Calcutt v. FDIC, 598 U.S. 623 (2023) (per curiam). We do the same here with the expectation that FDA will give petitioners the benefit of a full and fair regulatory proceeding on remand, notwithstanding its prior promises to reject their applications no matter what.

Slip op. at 1-2.

Sounds like the approach many local planning departments take: an owner wants to know what she can do with her property, and instead of helping clarify what can or can't be done -- or worse yet, holding out with what it only later asserts is an illusory procedure -- the government goes opaque and plays "gotcha" with the owner. We have our regulations and procedures, but it's up to you, property owner, to figure out how those regulations limit your property, and how to navigate our process. Do so at your peril, property owners.

If only more courts would refuse to tolerate this.

Hat tip to our law firm colleague Deb La Fetra for noticing this one.

Check it out.

Wages and White Lion Inv's, LLC v. Food & Drug Admin., No. 21-60766 (5th Cir. Jan. 3, 2024) (en banc)

Cases And Links From Today's ABA State & Local Govt Law Land Use Presentation

Here are the cases that Michael Berger and I discussed in today's presentation to the ABA State and Local Government Law Section's Land Use group. It was good seeing everyone, even virtually:

• Sheetz v. County of El Dorado - are legislatively-imposed exactions subject to the nexus and proportionality requirements of Nollan/Dolan? (SCOTUS)
• Devillier v. Texas - must the government consent to be sued for just compensation? (SCOTUS)
• Watson Memorial Spiritual Temple of Christ v. Korban - the payment of a final just compensation judgment is ministerial, and may be compelled by a writ of mandamus (Louisiana Court of Appeal)
• The New York Rent Control cases - two still pending (SCOTUS)
• Gearing v. City of Half Moon Bay - abstaining from adjudicating a regulatory takings case under Pullman abstention (Ninth Circuit; cert. denied)
• Ateres Bais Yaakov Academy of Rockland v. Town of Clarkstown - RLUIPA claim is ripe; court rejected the "land use is local" trope (2d Cir.)
• Catholic Healthcare Int'l, Inc. v. Genoa Township - RLUIPA claim ripe because Township had taken a "definitive position" on what uses were allowed and not allowed on plaintiff's property, even though there remained a possibility that the Township might allow the use (6th Cir.)
• Yes in My Backyard v. City of Los Angeles - the general plan is law, and controls over zoning (Cal. Super. Ct.)
• Idaho Power Co. v. Bean - some precondemnation entries are takings (Or. Cir. Ct.)
• Town of Apex v. Rubin - after a taking is invalidated for lack of public use, what if the condemning agency just takes it anyway? (N.C. S. Ct. review granted)

Check em out.

And if you are not a member of the ABA State and Local Government Law Section, you should be. Come, join us!

"Super-Zoning Board" No More - CA2 Busts The "Land Use Is Local" Trope: Town ZBA Doing Nothing On Variance Application Ripened Constitutional Claim

You remember that longstanding trope: that matters of land use are "local" issues, and thus in civil rights claims involving a state or local government interfering with the right of property federal courts should avoid adjudication until the government has had every chance to do the right thing (even where it is patently obvious that it has no intention of doing so)? This trope most often shows up as a part of a ripeness dismissal, where the court says "too soon," because, well, if given enough time and opportunity, the government might render adjudication unnecessary.

Well, in Ateres Bais Yaakov Academy of Rockland v. Town of Clarkstown, No. 22-1741 (Dec. 8, 2023), the U.S. Court of Appeals for the Second Circuit held a land use case ripe, and in the process blew up this overripe trope. Whoa!

But before you takings mavens get too excited, this is a RLUIPA claim. But that doesn't mean the applicable principles are not relevant. Indeed, this one is worth reading because the court navigates the rocky shoals of Article III ripeness in land use cases, and concluded that "federal courts have an obligation to adjudicate cases that invoke our jurisdiction, and we do not close our doors to litigants properly seeking federal review simply because their grievances touch on local zoning matters.: Slip op. at 17.

Before you get too excited again, this warning: the qualifiers "properly" and "simply" carry a lot of the work here, and the court doesn't conclude that if you make a constitutional challenge to a zoning or land use decision, your case is ripe and you are heading straight to the front of the line.

Here are the quick facts. The Academy wanted to build an Orthodox Jewish school. It entered into a purchase agreement to buy some land and lined up financing. It alleged that in response, "segments of the local community" formed to oppose the school, with one Town supervisor announcing "the the Town would 'strongly enforce' applicable zoning and building-code regulations of the property." Slip op. at 7.

Next up: a lot of the typical maneuvering during the zoning approval process, including the Town's fire inspector kiboshing a building permit application on the basis that the property lacked the minimum frontage required, and that a building permit could not be issued until the school obtained a variance from that requirement. Slip op. at 9-10. The school appealed to the Zoning Board of Appeals, asserting that the school met the frontage requirement. In response, the inspector asserted that the appeal papers were incomplete because the school had not submitted a property survey in support.

Survey? Where does it say we need a survey (said the school)? It claimed that "nothing in the Town Code or ZBA rules required such a survey, and the requirement served no practical purpose." Slip op. at 10. [Barista's note: this is typical, and local planning officials often reject applications and claim they cannot be processed because they are not complete, and when pressed about where the requirement to submit the allegedly "missing" information comes from have no answer or merely say "this is how we do things here - everyone knows that."]

But the school played ball and made and submitted a survey.

[But o]nce the survey had been completed, on May 7, [the school] requested a hearing date for its appeal to the ZBA. However, the ZBA failed to respond to this request, and the project came to a standstill. Subsequently, Investors Bank revoked its commitment to provide financing.

Id.

The ZBA's do-nothing approach continued, even in the face of the school pressing it repeatedly, at one point pointing out the failure of the financing as a reason it was considering the application revoked. Slip op. at 11. Then, to add insult to injury, {o]n October 3, the Town announced that it was purchasing the property for itself." Slip op. at 11-12.

Next up, federal court section 1983 and RLUIPA lawsuit. The district court dismissed; the federal claims were not ripe because -- you guessed it -- the ZBA had not yet decided. Slip op. at 13 ("the Zoning Board of Appeals, the municipal entity responsible for the administration of the zoning laws, never issued a final decision on the merits of [the school]'s application"). The claim was not ready, and thus failed the "case and controversy" requirement of Article III.

The Second Circuit reversed. As noted above, the court rejected the Town's argument that this, at heart, was a local zoning matter and that federal judges should therefore butt out. In holding the claims ripe, the court noted Pakdel's dictum that the ripeness requirement is "relatively modest" and that nothing more than "de facto" finality is needed. Slip op. at 18.

Applying those rules, the court concluded that the ZBA "reached a decision that was sufficiently final for ripeness purposes." Id. By "choosing not to adjudicate [the school]'s appeal[,]' the ZBA made a de facto decision. The complaint also plausibly alleged that the ZBA "declined to respond to at least five letters urging it to schedule a hearing." Id. And to cap it off, a Town official (its lawyer) "wrote to [the school] that the ZBA 'will not entertain any appeal by [the school] with respect to the [property].'" Id. 

"This letter made the ZBA's position pellucid[.]" Slip op. at 19. Dismissal reversed, and case remanded for more on the merits.

That is all well and good, but we issue a caution in cases like this, where the government has done some pretty outrageous things: it shouldn't take this much to get a court to agree that a case is ripe. As the Supreme Court reminded in Pakdel, this is a relatively modest requirement with only de facto finality required. Just because cases  like this one in which the government is going way overboard are well-within the ripeness requirement, does not mean that "lesser" government foot-dragging is okay.

Ateres Bais Yaakov Academy of Rockland v. Town of Clarkstown, No. 22-1741 (2d Cir. Dec. 8, 2023)

Here's The Program For The 41st ALI-CLE Eminent Domain And Land Valuation Litigation Conference, Feb 1-3, 2024, New Orleans

Here's the brochure and the full agenda and registration information for the upcoming ALI-CLE Eminent Domain and Land Valuation Litigation Conference at the JW Marriott in New Orleans, February 1-3, 2024.

This is the long-running nationally-focused conference on all things eminent domain, takings, valuation, and related. We have three tracks, from which you can choose a la carte - Practice, Substantive, and Condemnation 101:

For over 40 years, we’ve been bringing eminent domain practitioners together to examine the latest issues, engage in healthy debate, and get the information they need to stay current in their practice. This year – our 41st – is THE perfect time to reunite with your eminent domain colleagues. There will be plentiful opportunities to meet and mingle with the faculty and other registrants – throughout the conference and at evening social events. Attendees come back year after year to make new friendships and renew longstanding ones – in a welcoming environment and amongst others who share the same passion for this area of the law.

Please check it out. Over the next couple of weeks we shall bring you details of the various programs.

If you have joined us in the past, you know what a worthwhile conference this is. If this will be your first time, welcome; we hope that you will become a long-term colleague.

Register now, and reserve your spot. In the past few years, we've sold out the hotel block and the Conference seats. So don't miss out!

2024 ALI-CLE Eminent Domain and Land Valuation Litigation Conference Brochure, Feb. 1-3, 2024, New Orleans,...

New Takings Ripeness Cert Petition (Ours): One Variance, Two Variance, Three Variance...More?

Here's a takings cert petition, filed yesterday.

Because this is one of ours, we're not going to comment much beyond reposting the Question Presented, and to let you know this one is about how the "relatively modest" requirement that the government have taken some "definitive position" about what uses are allowed and what uses are not on a claimant's property -- as the Court noted in Pakdel, a "de facto" decision is enough. Yes, prudential ripeness.

Question Presented:

Matthew Haney sought to build a home on a small undeveloped island in Popponesset Bay, Massachusetts, zoned by the Town of Mashpee exclusively for single-family residential use. But building a home requires a variance from the Town’s setback and frontage requirements. Haney twice sought this variance, and twice the Town rejected his requests. The Town’s unqualified position that Haney could not obtain the necessary variance to build his home satisfies the usual indicators that a takings claim is justiciable. Suitum v. Tahoe Reg’l Plan. Agency, 520 U.S. 725, 736–37 (1997) (development plan plus one request for a variance ripens a takings claim). But when Haney sought just compensation in federal court, the First Circuit held the case does not present a ripe controversy because the Town suggested it may grant a third application for a variance if Haney first secured permission from the State of Massachusetts to build a steel bridge to the island.

The question presented is:

Can the government evade adjudication of constitutional takings claims on prudential ripeness grounds—after it has twice definitively denied necessary variances—by indicating that it may consider a third variance request if the property owner first obtains an additional permit from a different government agency?

A special shout-out to our law firm colleagues Jeremy Talcott and Deb La Fetra, who carried the load on this one.

Now we wait.

Petition for Writ of Certiorari, Haney v. Town of Mashpee, No. 23-____ (U.S. Nov. 1, 2023)

Backing Into Williamson County Again - CA6: We Already Said That State Officials Sued Individually For Compensation Have Qualified Immunity

The Sixth Circuit these days. Lots of property and takings-related stuff being decided in that court. See here, here, here, here, here, and here for some examples.

The latest is O'Connor v. Eubanks, No. 22-1780 (Oct. 6, 2023), in which an unsigned panel opinion (with concurrence of Judge Thapar in the result, but not in the reasoning), held that state officials sued in their individual capacities have qualified immunity from takings claims which seek just compensation. But are not similarly immune from procedural due process claims.

Short story: O'Connor was the payee on two checks that were delivered to his property. Apparently he got neither, so the payors turned the checks over to the State of Michigan, which treated them as unclaimed property.

Michigan's unclaimed property statute moves fast. It requires that the State, after first publishing notice, to sell or liquidate the property within 3 years if there's been no claim by an owner. The monies are deposited into the State's general fund, less admin costs. The owner can't then get the actual property back, but has a claim for the proceeds. The statute accounts for interest, "but only if their property accrued interest before the State took custody of it." Slip op. at 3.

O'Conner filed a claim to obtain the proceeds. The State paid him, but did not include interest. He claimed he is entitled to interest, and for the State to keep the interest is a taking requiring just compensation. O'Connor also claims the State did not provide his proper notice.

The Sixth Circuit summarily affirmed the dismissal of the takings claim because state officials sued in their official capacities have qualified immunity. The panel based its decision on recent circuit precedent (see this post for more on that). Here's the entirety of the opinion on that issue:

The Fifth Amendment’s Takings Clause provides that “private property” shall not “be taken for public use, without just compensation.” U.S. Const. amend. V. In his complaint, O’Connor alleges that the officials violated the Takings Clause. But under circuit precedent, Eubanks and Stanton are entitled to qualified immunity on these claims. See Sterling Hotels, LLC v. McKay, 71 F.4th 463, 468 (6th Cir. 2023). Earlier this year in Sterling Hotels, we held that individual liability for takings claims is not “clearly established.” Id. (“[N]o court in this circuit had yet decided whether an officer could be liable for a taking in his individual capacity . . . and at least one case suggested the contrary.”) (citing Vicory v. Walton, 730 F.2d 466, 467 (6th Cir. 1984)). Thus, we granted qualified immunity to an official sued in his individual capacity. Id. Because Eubanks and Stanton are also being sued in their individual capacities for takings claims, they are entitled to qualified immunity under Sterling Hotels.²

--------

²  O’Connor attempts to distinguish this case from Sterling Hotels, but the latter sets a clear rule: qualified immunity bars individual liability for takings claims under 42 U.S.C. § 1983^.

Slip op. at 4.

O'Connor also raised a takings claim against the State of Michigan itself, but we know where this one headed: that's right, the Eleventh Amendment has been interpreted as prohibiting a state from being sued for money in federal court, unless the state consents or there is no remedy in state court.

Thus, the panel Williamson County-d it, and held that O'Connor could sue Michigan in Michigan's courts under the unclaimed property statute which recognized a claim for unclaimed funds. Thus, "a remedy is available in state court." Slip op. at 7/

By contrast, the Sixth has not previously decided the same issue in a due process claim, so the panel concluded that interest is "property," and that the complaint alleged that O'Connor was provided "no process" at all (an allegation the defendants did not deny (choosing instead to argue O'Connor has no right to process). Thus, the state officials sued in their individual capacities do not have qualified immunity. Slip op. at 6.

On to Judge Thapar's concurring opinion. We suggest you read the entire opinion, which begins on page 8. It's not long. His bottom line: the defendants here "are off the hook for O'Connor's takings claim [because of circuit precedent as noted above]. But in the future, our circuit can and should permit takings claims against officials." Slip op. at 8 (Thapar, concurring).

The concurring opinion focused on the history:

Thus, in the early decades of our republic, lawsuits against officials were a viable remedy for takings. Indeed, because states enjoyed sovereign immunity, suits against officials were among the only takings remedies for most of the nineteenth century.

Slip op. at 11 (Thapar, concurring).

Judge Thapar also recognized that the Catch-22 that property owners who have federal just compensation claims against a state find themselves in does look awfully familiar:

If that doesn’t give us enough reason to reconsider Vicory, its combined impact with DLX should. When a state official takes someone’s property without compensation, two obvious defendants come to mind: the official who committed the taking, and the state. Yet our precedent forecloses suits against either defendant in federal court. Vicory prevents claims against officials. And DLX bars claims against the state in federal court. Skatemore, Inc. v. Whitmer, 40 F.4th 727, 734 (6th Cir. 2022) (citing DLX, 381 F.3d at 526–28). Thus, unless there’s a municipality to sue, plaintiffs must litigate takings claims in state court.

If this rule sounds familiar, that’s because it’s not new. It’s a version of the “state-litigation” rule. More importantly, it’s a rule the Supreme Court deemed “wrong” and “exceptionally ill” just four years ago. See Knick, 139 S. Ct. at 2178. In Knick, the Court rejected the idea that a plaintiff had no remedy in federal court until a state court denied him compensation. Id. at 2179. To hold otherwise, the Court noted, would “relegate[] the Takings Clause to the status of a poor relation among the provisions of the Bill of Rights.” Id. at 2169. Indeed, the Justices have repeatedly recognized that the state-litigation rule is “at odds with the plain text and original meaning of the Takings Clause.” Arrigoni Enterp. v. Town of Durham, 136 S. Ct. 1409, 1409 (2016) (Thomas, J., dissenting from denial of certiorari). So we should stop enforcing it.

To be sure, our precedent doesn’t impose a state-litigation rule in so many words. But together, DLX and Vicory get us pretty close. Unless a municipality is available as a defendant—and as this case shows, that’s not always the case—plaintiffs are stuck litigating in state court. At best, plaintiffs can sue the state in federal court if remedies aren’t available in state court. See Skatemore, 40 F.4th at 734. But Knick expressly rejected that kind of arrangement: “The availability of any particular compensation remedy . . . under state law, cannot infringe or restrict” an owner’s right to pursue a remedy in federal court. 139 S. Ct. at 2171. The Supreme Court shattered the state-litigation rule in Knick. Our circuit shouldn’t piece it back together with Vicory and DLX.

Slip op. at 11-12 (Thapar, concurring).

Stay tuned.

O'Connor v. Eubanks, No. 22-1780 (6th Cir. Oct. 6, 2023) (per curiam)

Cert Granted #1 - You Don't Need The Government's Permission To Obtain Just Compensation, Do You?

"I'll take 'Words I Like to See' for $800, Alex."

In this Order, the U.S. Supreme Court agreed to hear two important property rights cases (are there any other kind?). Both are cases we've been following -- and indeed are now playing a part in.

The first is Devillier v. Texas (the second is Sheetz v. El Dorado County which we've posted about here).

After what can only be described as a weird Fifth Circuit panel opinion, followed by an even more unusual post-cert petition en banc denial (complete with concurrals and dissentals), the Supreme Court granted the cert petition.

The Question Presented:

In First English Evangelical Lutheran Church v. County of Los Angeles, this Court recognized that the Fifth Amendment’s Takings Clause was “self-executing” and that “[s]tatutory recognition was not necessary” for claims for just compensation because they “are grounded in the Constitution itself[.]” 482 U.S. 304, 315 (1987). Since First English, several state courts of last resort have held that the self-executing nature of the Takings Clause requires them to entertain claims directly under the Clause without the need for statutory authorization. Two federal Circuits, the Fifth and the Ninth, disagree and have held that claims for just compensation are only available if they are legislatively authorized. The question presented is:

May a person whose property is taken without compensation seek redress under the self-executing Takings Clause even if the legislature has not affirmatively provided them with a cause of action?

In short, you don't need an authorizing or jurisdictional statute such as section 1983, do you?.

As the amicus brief which we filed along with our law firm colleagues Deb LaFetra and Kady Valois noted, we think the answer is pretty plain (no, you don't):

Consequently, because neither Congress nor a state legislature need agree to pay compensation, they do not need to adopt an implementing statute—and no waiver of sovereign immunity is necessary—for a plaintiff to invoke the judiciary’s authority to enforce the Constitution and impose a remedy. That is, if Congress repealed Section 1983 tomorrow, the constitutional mandate for just compensation remains. Or as this Court has put it, the Just Compensation Clause “of its own force” “furnish[es] a basis for a court to award money damages against the government[.]” First English Evangelical Lutheran Church of Glendale v. Los Angeles Cnty., 482 U.S. 304, 316 n.9 (1987) (quotation omitted).

Br. at 3.

This case is another in a long string of cases in which the Supreme Court is presented with the opportunity to rein in governments and stop the procedural game-playing. Whether it is telling property owners that they must chase approvals via a certain process only to later claim the process was not an official procedure so was meaningless. Or whether filing a state court eminent domain action so that it can ask the federal court to abstain from considering a landowner's already-filed regulatory takings lawsuit. Or asserting a statute of limitations is "jurisdictional," and therefore it doesn't matter that the government lulled the property owner into not objecting to his property being invaded by the public.The decisions in Knick and Pakdel were very obvious signals that the Court was exhausted (pun intended) with these type of exhausting games.

But the message apparently has only filtered down to the lower courts in fits and starts.

Take for example, the case now before the bench. The property owner took what might be considered an uncontroversial path: it sued the State of Texas for inverse condemnation, seeking just compensation for an allegedly State-caused flooding of the plaintiff's property. Nothing too wild about that. The plaintiff brought suit in the courts of the State of Texas. Again, nothing earth-shattering there, either.

But the State of Texas removed the case to federal court. That should set off your game-playing radar, since you'd think that Texas might prefer its own courts, and its own procedures, and its own jury pools. So why would Texas remove the case to federal court? It appears the only real reason was to make the following procedural gambit.

Once in federal court, Texas sought dismissal of the lawsuit. On what basis you ask? After all, any Eleventh Amendment immunity Texas might have enjoyed was waived when Texas itself invoked federal jurisdiction. But get this: Texas argued that the only way that the property owner could sue Texas for just compensation in federal court is if there is an enabling statute or some statute or authorization for a plaintiff to seek compensation. You need a vehicle, plaintiff. Well, what about the Just Compensation Clause itself, responded the property owner? Doesn't that say that if you take property government, that you must provide compensation?

Not enough argued Texas (and the district court and the Fifth Circuit agreed). You need more. The usual vehicle by which property owners seek just compensation for non-federal takings is section 1983, and here (Texas argued), that vehicle isn't available because it only applies to "persons," but the State of Texas isn't a person as that term is used in the statute. Only local governments and their officers are section 1983 persons. And lacking any other authorization to sue for just compensation for the alleged flood taking, the federal court could not consider the claim.

So where, under the State of Texas' theory, can a property owner go to raise these claims? Beats us. After all, if the owner goes straight to federal court seeking just compensation from a state, the state need only invoke its Eleventh Amendment immunity to get it dismissed. But if the owner goes the state court as the plaintiff did here, all that the state defendant need do is remove the case to federal court to make it magically disappear also. Wow.

Can you really have a right -- especially a right expressly set out in the Constitution itself -- that has no remedy and thus must rely on the government's consent? Not in our view.

And not just ours. It has been a fundamental principle that a "right" means there's a remedy, both on this side of the Atlantic and the other. As Justice Marshall put it in Marbury: ""The government of the United States has been emphatically termed a government of laws, and not of men. It will certainly cease to deserve this high appellation, if the laws furnish no remedy for the violation of a vested legal right." He didn't make that up. Lord Blackstone also noted, "it is a general and indisputable rule, that where there is a legal right, there is also a legal remedy, by suit or action at law, whenever that right is invaded."

So there you go. There it is. Finally. Follow the case here, or on the Court's docket here.

Brief Amicus Curiae of Pacific Legal Foundation in Support of Petitioners, Devillier v. State of Texas, No....

CA6: "The distric court's ripeness determination, in turn, was plainly mistaken"

Before you get too excited by the U.S. Court of Appeals for the Sixth Circuit's opinion in Catholic Healthcare Int'l, Inc. v. Genoa Twp., No. 22-2139 (Sep. 11, 2023), a spoiler up front: this may be a good ripeness decision, but this isn't a takings case.

But you takings mavens may still want to take a quick look over the opinion for how the court deals with a ripeness argument in a case where the plaintiffs assert the Township violated their rights by denying (twice) its requests for a land use special permit.

The story is about a walking path created by Catholic Healthcare that contains fourteen "Stations of the Cross" "depicting the "story of Christ's last day." Slip op. at 1. The Township insisted that Catholic Healthcare obtain a special use permit, because the Township believed that the trail use is the equivalent of a church.

So Catholic Healthcare sought a special use permit, and twice the Township said no. The Township required removal of the trail. Catholic Health sued, asserting RLUIPA and constitutional claims, and sought a preliminary injunction allowing it to restore the trail. The district court dismissed, concluding among other things, that the RLUIPA claim was not ripe.

The Sixth Circuit rejected that conclusion. Relying on Pakdel, the court concluded that the Township had adopted a "definitive position" on how its land use regulations apply to the plaintiffs' uses and land:

The district court’s ripeness determination, in turn, was plainly mistaken. A claim is unripe when “it rests upon contingent future events that may not occur as anticipated or indeed may not occur at all.” Texas v. United States, 523 U.S. 296, 300 (1998). In land-use cases, the necessary event is simply that the government has adopted a “definitive position” as to “how the regulations at issue apply to the particular land in question.” Pakdel v. City & County of San Fran., 141 S. Ct. 2226, 2230 (2021) (cleaned up). That has manifestly happened here: the Township has uniformly insisted that the plaintiffs obtain a special land-use permit for their religious displays; the Township Board has twice refused to grant them one, even when presented with an application limited almost entirely to those displays; and the Zoning Board of Appeals denied relief. Moreover, those events have “inflicted an actual, concrete injury” on plaintiffs, id., because the Township has actually forced them to remove the religious displays from their property.

Slip op. at 7. The district court held the claim was not ripe because in addition to receiving two permit application denials from the Township, Catholic Health had not also complied with the Township's administrative processes.

The court noted that "[t]he district court's mistake was to conflate ripeness (sometimes called 'finality' in this context) and exhaustion" when the district court held that the Township had not taken a final position until Catholic Healthcare had gone past the permit denial(s) and chased further administrative procedures. Slip op. at 8.

The Sixth Circuit held that one "no" is enough, and you don't really need a truly final decision (in other words, a decision that comes at the end of an administrative review process), but a court only need understand that the government is "committed to a position." Id. (quoting Pakdel, 141 S. Ct. at 2230). That this position might change later is of no consequence.

The opinion also made note of a good point - the ripeness requirement in these kind of cases (also takings cases) is there not to run the property owner through a maze of hurdles, but to ensure that the injury to the plaintiff is concrete enough. As the court held, "this case comes to us after Genoa Township has taken a definitive position, again and again, to the plaintiffs' concrete injury. Their claim is ripe." Slip op. at 8.

We think there are two good lessons to take from this one:

1. A reminder that ripeness does not require exhaustion. This isn't so much the "final decision" rule, but the "definitive position" rule. The Court meant what it said in Pakdel when it cautioned that the ripeness requirement is "relatively modest," and does not require exhaustion and crossing off all alternatives to get to a government's "yes." All it requires is a single "no."

2. The ripeness requirement is there so that courts can have confidence that the plaintiff has really been injured, which itself is a relatively modest requirement.

We suggest keeping those two things in mind in your next ripeness argument.

Catholic Healthcare, Int'l, Inc. v. Genoa Twp., No. 22-2139 (6th Cir. Sep. 11, 2023)

Can One Government Official Really Hold Up Necessary Water Uses? The Hawaii Public Water Trust In Action

According to the County, this is an "industrial" use,
incompatible with "agricultural" zoning

Note: sorry, this is one of those longer posts, but the topic is a serious one, so we felt it needed more than our usual cursory treatment.

How Can That Be?

We've been somewhat reluctant to post too much on the legal aspects of the Maui wildfires (other than to comment on the first lawsuit), just because it still seems "too soon." The focus should be on aiding the victims and helping those who want to rebuild to do so, and not on premature blamestorming (see also this), legal theories, and  the "opportunities" this disaster presents (see also this, this.and this).

But we did want to clear one thing up. There are a lot of stories (see here, here, and here, for example), about the State of Hawaii official -- the Deputy Director of the Commission on Water Resource Management and an employee of the State Department of Land and Natural Resources -- who allegedly refused for several hours to release water as requested to fill reservoirs, until first obtaining the approval of a taro farmer.

A lot of the reaction has been of the "how could this be?" variety. How can a government official refuse to release water needed for fire suppression? How is it that a private kalo (taro) farmer needed to be asked for approval? Can this be accurate?

Short story: yes.

This is exactly how Hawaii's water law is designed to work, and is the system functioning as intended. And please don't get us wrong -- we're not at all suggesting that working-as-designed has resulted in a system that actually, you know, works. No, we are being purely descriptive, not normative, and just laying out our experience about how Hawaii water law plays out day-to-day in all its intended glory.

Bottom line: the water law regime in Hawaii is designed so that a government official can hold up water uses -- even if that use is to fight fires.

No Private Rights

First, it is essential to understand that conflicts over water use are not a new thing, and have been ongoing for centuries. Second, you must realize that all water in Hawaii -- and by that we mean all water -- fresh, salt, surface, ground, runoff, freshet, riparian, stream, ocean, lake, you-name-it -- is owned by the public, and administered by every agency at every level of state and municipal government under a trust-beneficiary model.

This approach is unique to Hawaii. But how did it develop?

It wasn't always this way, and for more than a century, Hawaii's water law -- mostly developed though court cases -- followed its English and American counterparts with a few local modifications. The law recognized private rights to "own" and use water, subject to the rights of others.

But in the 1960's and 1970's, the activist Hawaii Supreme Court began altering the governing law, ultimately concluding that water resources are (and have always been) incapable of private ownership -- despite a century of Hawaii common law that seemed to hold otherwise. The court began developing the idea that water is a public resource and consequently is impressed with a "public trust."

In a clever bit of sleight-of-law, the court held that the "public trust' doctrine was adopted by the Kingdom courts in the 19th Century, and then "later decisions of this court confirmed the acceptance of the public trust doctrine in this jurisdiction." Kelly v. 1250 Oceanside Partners, 140 P.3d 985, 1002 (Haw. 2006). The problem with that conclusion is that the "public trust" doctrine referred to in the 19th Century Kingdom cases was the traditional public trust -- the one that has its roots in Roman and English law -- the public's right to use navigable waters for activities such as commerce, navigation, and fishing. It had nothing to do with ownership of the water, or water rights, or the government's authority to control and regulate uses. Instead, the newly created "public trust" doctrine the Hawaii Supreme Court was referring to was much broader, and applied to all water whether navigable or not, and all uses whether related to commerce or navigation.

National Property Scholar: You Keep Using the Term "Public Trust." I Do Not Think It Means What You Think It Means

As renown property and water rights scholar Thomas Merrill wrote:

The public trust doctrine burst forth in Hawaii, in a big time way, as part of a series of highly controversial decisions by the state supreme court involving water rights. The rights in question did not involve the public right of access to navigable waters for commerce and fishing -- the classic issue in Illinois Central and Oahu Railway. Instead, these decisions have involved the rights to consumptive uses of water for purposes like irrigation or public drinking water systems -- what the Hawaii courts call "water resources" law. The public trust doctrine has never been applied to water resources in this sense in Illinois or New York. Indeed, the only other state besides Hawaii that has extended the doctrine in this fashion is California. And even there, the famous Mono Lake decision involved the diversion of waters by the city of Los Angeles from tributaries of a navigable lake, so the diversion had an impact on navigation. In Hawaii, the connection to navigation has been cut altogether.

See Merrill, The Public Trust Doctrine: Some Jurisprudential Variations and Their Implications, 38 U. Haw. L. Rev. 261, 276-277 (2016) (footnotes omitted). (For a much different view of this, see this story.)

In altering the longstanding rules, the Hawaii Supreme Court based its rulings on, among other things, a 1978 amendment to the Hawaii Constitution, which, according to the court, publicized all water resources:

The State has an obligation to protect, control and regulate the use of Hawaii's water resources for the benefit of its people.

The legislature shall provide for a water resources agency which, as provided by law, shall set overall water conservation, quality and use policies; define beneficial and reasonable uses; protect ground and surface water resources, watersheds and natural stream environments; establish criteria for water use priorities while assuring appurtenant rights and existing correlative and riparian uses and establish procedures for regulating all uses of Hawaii's water resources.

Haw. Const. art. XI, § 7.

The long and the short of it is that all Hawaii water is incapable of private ownership. (So if anyone tells you that there are what you think of as "water rights" in Hawaii, they are in our opinion mistaken. Or at least the concept of a substantial private interest in water is markedly different in Hawaii than elsewhere.) In case you are wondering, yes, there have been challenges to this altered water regime as a taking, both legislative and judicial. But those cases mostly went nowhere, with the most significant challenge crashing and burning on the shoals of Williamson County's ripeness doctrine.

The Regulatory Regime

Next, after effectively publicizing private water rights, the Hawaii Supreme Court imposed a regulatory system -- again based on this new "public [water] trust" concept -- on how the State and its subsidiaries and agencies were to "control and regulate" water (as that term is used in article XI, noted above). The obligation to control and regulate water use extends to all uses of water, no matter how de minimis the use, or how necessary (such as fire suppression).

If you think we might be exaggerating about this, we offer an example (other than the Maui fire situation), from one of our own cases from when we were in private practice.

Setting the Stage for Lahaina

In Kauai Springs, Inc. v. Planning Comm'n of the Cnty. of Kauai, 324 P.3d 951 (Haw. 2014), "Kauai Springs" was a small, family owned business that purchased approximately 750 gallons per day of water emanating from a natural spring on the island of Kauai. For more than a century, thousands of gallons of water per day had naturally flowed out of the spring, where it was channeled into an above-ground pipeline to irrigate sugar fields several miles from the source. The water wasn't pumped out or down -- gravity did the work. When the sugar plantations went away in more recent times, a small portion of the water in the pipe was used by several nearby homes as drinking water, but otherwise, thousands of gallons of water per day emptied from the pipeline into a nearby stream bed where it eventually flowed into the ocean.

Sensing an opportunity, a Kauai family obtained a license from the owner of the spring to capture some of that water, ensure it was up to USDA water quality standards, and bottle it in those 5-gallon plastic bottles that go on top of a dispenser unit. The family would deliver these to homes and offices on the island.

The problems began when someone dropped dime and reported to the Kauai County Planning Department that Kauai Springs was making an "industrial" use of land zoned for agriculture. Sure enough, planning officials paid a visit and issued a notice of violation and a shut down order.

Kauai Springs sought after-the-fact permits allowing its use as either a special use, or as a conditional use. You land users understand that when an unpermitted use is kind of like a permitted use, and really won't have much of an impact on the land, then very often the owner may be allowed to make an otherwise unpermitted use. That was the case here, where Kauai Springs argued that putting water into 5 gallon bottles at its facility (see photo above) was not that much different than typical agricultural uses, and had no significant different impacts on the land or the surrounding properties.

But the County of Kauai denied the permits. Why? Not because the building (see above photo) or the low-impact activity of bottling water are incompatible with agricultural zoning. Rather, it was because Kauai Springs was bottling water, and it had not proven that using 750 gallons per day from the pipeline flowing thousands of gallons per day into the ocean would not significantly impact the water resources of the County of Kauai.

You read that right. Seven-hundred-and-fifty gallons per day represented .22% (that's 0.0022 for you who are mathematically-challenged like me) of the total daily output of the spring. So minuscule that when we tried to create a demonstrative exhibit to show how little this was "impacting" water resources, it was impossible because in order to get the X-axis (Kauai Springs' useage) large enough to be visible, the Y-axis (total volume) would not fit on any reasonably-sized poster board - it would have needed to be yards long. 

Additionally, the County said that until the State Public Utilities Commission and the State Commission on Water Resources had weighed in, it was premature for the County to grant a zoning permit that might affect the County's water resources. Never mind that both agencies did not have subject matter jurisdiction over this, and had told the County so.

An Already Long Story Shorter

By the time the case reached the Hawaii Supreme Court, the first big issue was whether under the Hawaii public water trust, county agencies like the Kauai County Planning Department and Planning Commission have an obligation to make searching inquiries into whether the grant of zoning permits might affect the County's water resources. After all, neither agency has any expertise in the area of water regulation. Their expertise, if any, is in land use, not water and hydrology. Surely the public trust cannot be read as requiring every state and local agency to make its own independent determination about water resources, and in the case of Kauai Springs, the County agencies could simply adopt the views of the State PUC and the State Commission on Water Resource Management that there was nothing here to worry about.

The second question was who has the burden of demonstrating that use of 750 gallons per day would or would not detrimentally impact the County's water resources. While that might seem like a common-sense determination in light of the overall amount (.22%), the court was asked whether the County could deny the zoning permits on the basis that Kauai Springs had not met its burden to show to the satisfaction of the County that 750 gpd would not have a serious impact on the County's overall water resources. (Remember, Kauai bills itself as one of the "wettest spots on Earth.")

Could the County rely on the precautionary principle writ large? Does Hawaii's public water trust really enshrine the principle of inaction in the face of any doubt?

The Precautionary Principle Reaches the Parody Stage

Bottom line: yes, it does.

The Hawaii Supreme Court held that every agency and official in Hawaii -- state and county -- has a duty under Hawaii's public water trust to protect water resources. It doesn't matter whether the agency has any type of interest or expertise in water regulation, or the decision it is being asked to make (remember that Kauai Springs was asking the County for zoning permits, not asking its permission to use the water).

The court rejected the extreme hypothetical we posed - does the public water trust require that the local DMV make an inquiry about whether issuing a commercial driver license to the driver of a water company truck? After all, issuing a CDL to someone who drives a truck to deliver water might affect the public's water resources. Aw, come on that is ridiculous you say? What business does the DMV have in regulation of water uses? Every business, the court held. The public water trust is a sacred obligation, and the court held that the Hawaii Constitution's language ("The State has an obligation to protect, control and regulate the use of Hawaii's water resources for the benefit of its people.") means that the State itself, every State agency, and every municipality and municipal agency has an obligation to "protect, control and regulate" water. Yes, even the DMV.

Moreover, to fulfill this duty, these officials and agencies cannot rely on the conclusions of other -- perhaps more appropriate and expert -- agencies and officials. Thus, the Kauai Planning Department and the Planning Commission could not consider their public trust duties fulfilled by noting that the State Commission on Water Resources and the state PUC had both disclaimed any interest in Kauai Springs. The County agencies have an obligation to make their own independent determinations.

Next, the court concluded that the public trust duty is fulfilled by these agencies and officials if they rely on the precautionary principle to place the burden on the user of water and do nothing if the user can't disprove that its use will not adversely impact water resources. In the absence of convincing proof of no impact, the government as the trustee of the public water trust can deny, deny, deny any request for action.

Thus, the County properly denied Kauai Springs' zoning permits.

How it Works

This regime works as it intended (to slow or stop development, to give anyone who might object to a use or action a way to challenge it, and to not act when in doubt (which there almost always is)). But you can see how this regime can be deployed selectively. For example, after the Supreme Court issued its opinion, a liquor manufacturing facility across the highway from Kauai Springs sailed through the zoning and permitting process without a squeak of objection even though it makes its product from water from the exact same water source that resulted in the problem with Kauai Springs, and uses a ton more water. But did anyone even ask whether making liquor (whose main ingredient is water) would affect water resources and insist that the producer disprove an adverse impact on Kauai's water resources? 

No, and there's the rub. The way this works is that officials and agencies have nearly total discretion to apply the exacting public water trust standards ad hoc. There's no requirement of comprehensiveness, or that every action be evaluated under the public water trust. Only a requirement that every agency and official do so when prompted (either sua sponte, or by third-party objectors who object to the underlying action).  

In short, if Water User "A" can stay off the radar, no sweat. Nobody seems to want to challenge the liquor producer, or new hotels (which use a ton of water daily without any restrictions), or the new car wash. But if someone drops a dime on Water User "B," or B ends up on its own catching a government official's attention, then the Kauai Springs principles spring into action:

If there's doubt, do nothing

In our opinion, that's what looks like might have gone on when that State of Hawaii official did not immediately act to release water for fire suppression (if that is indeed accurate, as the news stories report). You can see how government agencies and officials -- used to denying, delaying, and deferring -- are not really that used to acting quickly and decisively to release the precious public resource of water, even when the situation dictates quick action. After all, a wrong move will invite claims that the official -- a trustee of the trust with fiduciary responsibilities to the public to preserve, protect, and conserve the resource -- breached this sacred duty.

In short, Hawaii's water law is very conservative: go slow, do nothing, be sure before you act; there's no downside to doing nothing.

To answer this post's headline's question, "Can one government official really hold up necessary water uses?"

You bet. That's the Hawaii public water trust working as it was intended. There isn't a necessity, or let's-save-some-lives exception, at least just yet.

Sadly, it looks to us like this just had some devastating consequences.

Kauai Springs, Inc. v. Planning Comm'n of the Cnty. of Kauai, No. SCWC-29440 (Haw. Feb. 28, 2014)

CA8: 11th Amendment Trumps The Fifth Amendment - Just Because Just Compensation Is A "Self-Executing" Federal Remedy Doesn't Mean You Get To Come To *Federal* Court

Remember after Knick when we predicted that the Supreme Court's opening back up the federal courthouse doors wasn't the end of the procedural gamesmanship, but merely the opening of a new chapter? That it was time to dust off your old Federal Courts hornbook, because things like the Eleventh Amendment, Rooker/Feldman, abstention, and similar, were going to spring up as the way to avoid the merits of takings claims? That's we're going to be experiencing Williamson County, Phase 2?

Here's more proof (as if you needed it).

In EEE Minerals, LLC v. North Dakota, No. 22-2159 (Aug. 30, 2023), the U.S. Court of Appeals for the Eighth Circuit held that a takings claim against the State of North Dakota was barred from being litigated in federal court because the State can't be sued in federal court - even if the right to just compensation is self-executing.

This is a mineral rights fight, and the property owner claimed that when the North Dakota legislature (allegedly) shifted the historical high water mark on the Missouri River -- which presumptively gave the State mineral rights that the owner claimed belonged to it -- the State took property for public use.

In December 2020, EEE Minerals and Vohs sued North Dakota, the Lands Board, and the Commissioner of the Board in federal court. They claimed that the North Dakota statute was preempted by the Flood Control Act, and that the defendants had taken property from EEE Minerals and Vohs in violation of the Fifth Amendment. The plaintiffs sought damages, declarations that the North Dakota statute was preempted by federal law and that an unconstitutional taking had occurred, and an injunction prohibiting the defendants from claiming ownership of the mineral interests under state law.

Slip op. at 4. The district court dismissed.

The Eighth Circuit affirmed. We won't go into the question of whether the federal Flood Control Act preempted the North Dakota statute, but will leave it to those of you interested in that issue to digest pages 5-7. Short answer: no, it didn't.

The takings stuff begins on page 7 of the slip opinion. That claim fared no better:

Vohs next asserts that North Dakota, the Lands Board, and the Commissioner committed a taking of property without just compensation, in violation of the Fifth Amendment as incorporated against the States. She contends that when the State defined its mineral rights based on the historical ordinary high water mark, the State took mineral rights that were reserved to EEE Minerals and Vohs without providing compensation. We conclude that Vohs’s claims for damages and injunctive relief are barred by the Eleventh Amendment.

Slip op. at 7.

The court rejected the owner's argument that because the obligation to provide just compensation is self-executing, an owner whose property has been taken is entitled to seek that compensation in federal court. Go press your federal claim in state court, property owners:

The Supreme Court has not directly addressed the interplay between the Fifth Amendment and the Eleventh Amendment. But in Reich v. Collins, 513 U.S. 106 (1994), the Court addressed an analogous situation involving a self-executing right under the Due Process Clause. The Court explained that even though the Fourteenth Amendment provides a right to a remedy for taxes levied in violation of federal law, “the sovereign immunity States enjoy in federal court, under the Eleventh Amendment, does generally bar tax refund claims from being brought in that forum.” Id. at 109-10. Instead, state courts were required to entertain suits against a State to recover taxes unlawfully exacted.

The same conclusion applies to a claim under the Takings Clause. There is no dispute that Vohs may bring her [federal] takings claim in North Dakota state court.

Slip op. at 8-9.

But what about prospective equitable relief (the Ex parte Young "exception" to the usual Eleventh Amendment rule)? The court wasn't having any of that because it concluded that the owner's claim for injunctive relief was just a claim for damages in disguise. "Vohs simply repackages her claim for monetary relief as a request for an injunction that cures past injuries and requires the payment of just compensation. This reformulated request for retrospective relief is likewise barred by the Eleventh Amendment." Slip op. at 9.

Stay tuned for more.

EEE Minerals, LLC v. North Dakota, No. 22-2159 (8th Cir. Aug 30, 2023)

ALI-CLE's Eminent Domain & Land Valuation Litigation Conference (Feb 1-3, 2024, New Orleans): Why Attend? Here's Why.

Why is it, you ask, that the ALI-CLE Eminent Domain & Land Valuation Litigation Conference (scheduled next February 1-3, 2024, in New Orleans) is an event that seems to be growing in popularity and attendance. In recent years, we have standing room only in the Conference halls, and have sold out the hotel block. After all, this is a pretty niche area of law. So what gives?

When we were in Austin earlier this year, we thought it might be nice to try and answer that question. We asked Conference participants why they come, year-after-year (and in Austin, despite massive travel disruptions). Yes, it is the various venues (Nashville, Austin, Scottsdale, Palm Springs, to name a few recent locations), and yes, it is the excellent and useful programming.

But as we suspected it is more than that. As the above video notes, the consistent response from our participants about why the attend is the participants. The faculty and other attendees, the vendors. The collegiality, the chance to renew long-standing friendships, and especially the chance to make new friends and colleagues who share our passion for this area of law. The welcoming environment, and our desire to have lawyers and other professionals new to this area of law or new to the Bar feel at home and welcomed.

I can personally attest to that one, having been welcomed to a Conference long ago by Toby Brigham, who although he was one of the Chairs of the event, made it a point to notice that I was a new attendee, and to introduce me around to the "old hands."

We have also made a big effort in the last few years to include a range of professionals from various perspectives, including lawyers, legal academics, jurists, appraisers and MAIs, planners, right of way and relocation experts, and jury and trial consultants. Family members also welcome (there are a lot of "adjacent" social and networking events, and families are welcome as long as they don't mind a lot of "shop talk"). Our program is a mix of practical and substantive sessions.

We also have a special track on the first day of the Conference designed as a crash course in Eminent Domain law ("Condemnation 101"), which is a good place for an overview and introduction to the practice, or as a refresher course for those with more time under your belt.

In short, we try and make the Conference not just a place to learn the latest in eminent domain and related topics, but somewhere you can return to each year, and feel welcome.

So if you have not attended before, give us a try! We'd love to see you in New Orleans in just a few months. Registration and hotel reservation now open. Sign up now, and don't miss out.

Ohio S Ct Rejects Attempt To Import Regulatory Takings Ripeness Into Physical Takings

A short (but interesting) one from the Ohio Supreme Court. In State ex rel. Balunek v. Marchbanks, No. 2021-1469 (July 25, 2023), the court held that a physical takings claim alleging the DOT cut off access to property was ripe, even though the owner might have applied for permit to gain access.

As part of a road construction project, ODOT removed and didn't replace two driveways to the property, landlocking it. ODOT admitted it did so, but didn't include the lost access in the compensation by arguing "that access could be [re]established if Balunek obtains a 'street opening permit' from Cleveland. Slip op. at 3.

The owner sued, seeking a writ to compel ODOT to formally condemn the access. Remember that Ohio does not recognize the usual inverse condemnation remedy, but in situations where an owner asserts its property has been taken and the government has not paid compensation, the owner seeks an order to compel the government to formally take.

The court had no problem concluding that ODOT wiping out the property's access and landlocking it was a taking:

{¶ 12} Balunek has clearly and convincingly established that ODOT took property beyond that for which it has already commenced appropriation proceedings. Prior to ODOT’s construction project, the property had access to abutting roads through driveways and an easement. ODOT, however, destroyed the property’s driveways that connected it to East 93rd Street and did not replace those driveways or provide alternative curb-cut access. The project also eliminated the property’s easement access to Woodland Avenue. The property is thus currently inaccessible to lawful vehicular traffic; to obtain access, Balunek would need to apply for and be granted a street-opening permit from Cleveland and then rebuild the driveways himself. ODOT’s construction project has deprived the property of all access to an abutting roadway and thus constitutes a taking.

Slip op. at 4-5.

The court next dealt with ODOT's "sole argument that Balunek is not entitled to a writ of mandamus," slip op. at 5,which asserted it hadn't taken the property because the owner might obtain a street opening permit from the city. This was not described as a "ripeness" argument, but anyone familiar with regulatory takings litigation recognizes it as such (the government asserting that a court can't tell whether the defendant has taken the owner's uses of property, because there hasn't been a decision on what uses are allowed, if any). Here, ODOT asserted there could not be a taking of access, because the owner might get access, if only it asked: "ODOT argues that requiring a property owner to obtain a permit to use his property does not constitute a taking." Slip op. at 6.

ODOT relied upon a case in which the court held that the denial of a mining permit was not a taking. Requiring you to get a permit before you can use your land isn't necessarily a taking, because -- as the old saw goes -- the existence of a permit system implies that a permit might be granted. This is the same thing, right?

No, the court held, this is much different. The requirement that you seek a permit before you can allege a taking (aka ripeness) only works for those cases where the denial of a permit is alleged to be a taking. So the argument might work in a case where the city denied the owner permits to build driveways. Here by contrast, ODOT eliminated existing access to the property, and the owner is alleging that is a taking:

In contrast, here, the taking has already occurred—ODOT eliminated the property’s access to abutting streets by removing its driveways. ODOT argues that an obligation to compensate for a taking is somehow extinguished if the landowner can, at his own cost, potentially obtain a permit to access his property from a roadway; ODOT has cited no authority for such a proposition.

Slip op. at 6-7.

Seems about right to us.

State ex rel. Balunek v. Marchbanks, No. 2021-1469 (Ohio July 25, 2023) (per curiam)

Tex App: Nollan/Dolan Challenge To Annexation Fees Not Ripe: You Have To Apply For Annexation To Find Out What The Fee Will Be

The city told an owner whose three parcels were outside of the city's jurisdiction that if it wanted the city's permission to replat into 74 parcels, it would need city water and sewer service to each of the proposed lots.

So the owner asked to connect to the city's water and sewer system (deliberately overbuilt to account for future users, apparently), and in response, the city told the developer that it would have to do two things. First, it would have to contribute to the cost of building the system by purchasing water/sewer chits (our term). When the system was built, the city anticipated future connections and created a chit system by which future connections would help pay for the cost of construction. Second, in order to purchase these chits, the buyer's property must be included within the city's jurisdiction. And that meant a voluntary annexation. Annexation does not come free, because a city ordinance set the price tag of annexation between $220k - $350k.

The developer was ok with buying the chits, but not with paying the annexation fees, and sued the city. It argued it had a right to purchase the chits, and the city's ordinance worked a taking under the Texas Constitution because the city had not shown an essential nexus and proportionality between the fee and the annexation exaction (apparently, the unconstitutional conditions test is the same under Texas' constitutional law as the Nollan/Dolan/Koontz federal standards).

In Consolidated Towne East Holdings, LLC v. City of Lardeo, No. 04-22-00130-CV (July 12, 2023), the Texas Court of Appeals held that Consolidated's takings challenge was not ripe. The costs were not yet "authoritatively set." Slip op. at 10. You have to apply for annexation to find out what the actual fee will be:

Consolidated’s takings claim presents an unusual challenge. Unlike in Nollan, Dolan, and Stafford Estates, in which the conditions required for the permits and plats were authoritatively determined by the government entity wishing to impose the exaction, here, the conditions the City requires for annexation and the annexation fees have not been finally determined. See Dolan, 512 U.S. at 379–83 (permit conditioned on dedication of property for use as public greenway and path); Nollan, 483 U.S. at 828–29 (permit conditioned on creation of public easement); Stafford Estates, 135 S.W.3d at 623–24 (plats conditioned on rebuilding road with concrete). The City argues that, by failing to apply for annexation, Consolidated has deprived the City of an ability to consider and rule on actual costs related to annexation. The result, according to the City, is that “actual or roughly proportional costs cannot be established,” and it asserts Consolidated is seeking an advisory opinion about hypothetical costs.

Slip op. at 9.

The court also rejected the owner's argument that the annexation fees (whatever they might be) have no nexus to water and sewer hook up, because the nexus has already been accounted for in the price of a hook-up chit. Not so, held the court, because the annexation fee covers other things: "While annexation is required to obtain [chits], the purpose of annexation, according to the City, is not coextensive with the purpose of [chits], and, therefore, the cost to annex addresses different government interests than the cost for [chits]." Id.

So let's see if we get this right: you have to apply for annexation so the city can determine how much it is going to charge for annexation? Yes. According to the city:

Although the costs may vary from year to year, they are applied using calculations based on the level of development selected by the developer and the development plans. The calculations apply to all annexation applicants based on, among other things, lot size, number of lots, and whether the property will be for residential or commercial use.

Slip op. at 10.

That was enough for the court. No final decision applying the rule to the owner's use and development plans, so any takings challenge is premature:

We stress that Consolidated’s takings claim complains principally about annexation costs. In other words, Consolidated does not complain about annexation alone. In fact, its attorney stated at the hearing on the parties’ motions for summary judgment: “There is no dispute that the City certainly can annex property within its extraterritorial jurisdiction within its discretion. [Consolidated] has no objection to that. [Consolidated] has no objection to being annexed by the City in that capacity.” However, because we do not know the cost to annex, we cannot perform the fact-specific, rough proportionality inquiry required by Nollan and Dolan.

Slip op. at 11-12 (footnote omitted).

Consolidated Towne East Holdings, LLC v. City of Laredo, No. 04-22-00130-CV (Tex. Ct. App. July 12, 2023)

CAFED: Just Because The Govt Seized Property As Evidence Doesn't Mean It Can Keep It Without Compensation

Here's the latest in an issue we've been following.

Let's say the government thinks you have committed a crime (or someone else has). To investigate, it seizes property as evidence or potential evidence. But after things wrap up and it no longer needs the property as evidence, the government doesn't return it to its owner. Taking or no taking?

Some courts say it could be a taking. Others say no.

In Jenkins v. United States, No. 22-1378 (June 28, 2023), the U.S. Court of Appeals for the Federal Circuit said maybe. Or at least it isn't not a taking simply because the government was lawfully exercising its police power. And if there may be open questions about the whether the owner sought recovery of the property through available procedures or outright abandoned it, then a court entering summary judgment for the government isn't right.

Most of the facts of the case are clear: the DEA thought Jenkins was "involved in a drug conspiracy." In the course of its investigation, it seized two vehicles registered to Jenkins' mother, but used exclusively by Jenkins. It towed the vehicles to a private impound lot and put a "hold" on them (as the court noted, "[i]t is not entirely clear what a 'hold' is, but the parties appear to agree that it had the effect of giving the government control over the vehicles and preventing the impound lot from doing anything with the vehicles, such as selling the cars without the government's authorization.").

Jenkins eventually pled guilty to a drug charge and got a sentence of 252 months (21 years). "On October 21, 2013, between Mr. Jenkins’ guilty plea and his sentencing, the government contends that the hold on the vehicles was released." Slip op. at 3. The impound lot wrote to the titleholder (mom), telling her that if the accumulated fees were paid, the cars could be reclaimed. Mom said she never got this notice. Jenkins never got any notice at all, and the government didn't do anything to let him know beyond telling him in the underlying criminal case that he could go pick up the vehicles. And finally, the lot sent another (final) notice to mom to come get the cars in 10 days, or we're going to consider them abandoned. Mom "did not receive the letter because she was incarcerated." Slip op. at 4. Yikes. 

Jenkins had actual notice apparently, and tried to get the government to give back the cars under a special procedure available in criminal cases (Fed. R. Crim. P. 41(g) if you are interested). But even though the government told him that the cars were available in the impound lot and the court dismissed as moot Jenkins' separate claim that the government was wrongfully holding his cars (because the government indicated it was going to give back the cars), apparently the cars had been sold and the proceeds kept by the impound lot "apparently at least in part to satisfy towing and storage charges." Id. (

Next up, a Little Tucker Act physical takings claim in the district court. Yes, Little Tucker Act because these were used cars, not Sonny Crockett high-profile drug dealer cars. Jenkins threw in a due process claim for good measure and sought damages as a remedy for that. The district court dismissed the due process claim because there's nothing that allows you to get damages against the federal government for due process violations, and granted the government summary judgment on the takings claim on the basis that the cars were seized and retained by a valid exercise of police power (yes, we know the federal government arguably doesn't have general police powers, but work with us here), and there can be no takings claim in these situations. 

The appeal was transferred from the regional circuit (CA8) to the Federal Circuit (you CFC/CAFED mavens understand that process), which disagreed with the dismissal of the takings claim.

First, it made short work of the district court's rationale. Having a valid reason for the seizure and keeping does not insulate the government from takings liability:

The district court held that there was no takings liability because the government’s action was a lawful exercise of the police power. In this respect we think the district court erred. To be sure, as the government points out, we have consistently held that the government is not liable under the takings clause for property seizure during a criminal investigation or for damage to such property in its custody, even if the decrease in value renders the property essentially worthless. None of these cases, however suggests or even considers whether the police power exception immunizes the government from liability for failing to return property legally seized after the government’s need to retain the property ends.

While the United States’ police power may insulate it from liability for an initial seizure, there is no police power exception that insulates the United States from takings liability for the period after seized property is no longer needed for criminal proceedings. In this respect, we agree with the Third Circuit in Frein v. Pennsylvania State Police that “[t]hough valid warrants immunize officers who stay within their scope, they are not blank checks,” and once criminal proceedings have concluded the government “needs some justification” to retain the property without compensation. 47 F.4th 247, 252–53 (3d Cir. 2022). Even when the initial seizure and retention of property is properly done pursuant to the police power, the police power does not insulate the government from liability for a taking if the property is not returned after the government interest in retaining the property ceases. The district court erred in concluding that the legitimacy of the initial seizure precluded liability for failure to return the property.

Slip op. at 8-10 (footnotes omitted).

A good lesson, and one that many courts have not learned.

But that wasn't enough to send the case back, and the Federal Circuit concluded the factual record was not developed enough for the district court to make a decision, such as did the government retain the cars itself or did it surrender them to the impound lot? See slip op. at 11. Did the government notify Jenkins of his ability to recover the cars in a Rule 41 proceeding? And what about that "hold," and whether Jenkins abandoned the cars. Slip op. at 13. And finally, was the impound lot the agent of the government when it sold the cars? Slip op. at 14.

So this one is not over. And by the way, the Federal Circuit affirmed the due process dismissal, kind of: "The theory is that an illegal exaction occurred when and if the government transferred the cars to the impound lot. Mr. Jenkins’ problem is that while his pro se complaint generally alleged a due process violation, it nowhere asserted an illegal exaction theory. The district court did not err in dismissing this due process claim for lack of jurisdiction. However, on remand Jenkins may seek leave to amend to assert an illegal exaction claim." Slip op. at 16. 

Jenkins v. United States, No. 22-1378 (Fed. Cir. June 28, 2023)

New Takings Ripeness Cert Petition (Ours): Knowing The Permissible Uses "to a reasonable degree of certainty" Is All You Need For A Claim To Be Ripe

Here's the cert petition, filed last week, in a case we've posted about. See here (Ninth Circuit arguments) and here (en banc petition).

The Ninth Circuit affirmed dismissal of a takings claim because (it held) the claim isn't ripe. The government hasn't made up its mind, and just might allow the owners to make some use of their residentially-zoned land (even though the property is also subject to an overlay zone that expressly prohibits residential development). More background here. 

This is one of ours, so we're not going to be saying too much more about it. The petition also lays out the situation.

Here are the Questions Presented:

Randy Ralston and Linda Mendiola (Ralstons) wish to build a retirement home on their residentially-zoned land in San Mateo County, California. However, their property sits entirely within an overlay zone, the Montecito Riparian Corridor (Corridor), which categorically bans residential development. The County nonetheless instructs landowners who wish to build a home to submit their “intention” to the Community Development (Planning) Director and County Counsel, who must undertake a “takings analysis” to decide whether to “override” the Corridor’s absolute ban to prevent a taking. When the Ralstons followed this procedure, the Planning Director and County Counsel responded that there was no justification “to override the Local Coastal Plan limitations on development within wetland and riparian areas in order to accommodate a reasonable economic use.” No procedure exists to challenge this decision. In short, the answer was an unambiguous and unappealable “no.” The Ninth Circuit held that the Planning Director and County Counsel’s response, though they were speaking for the County, was “informal,” and that the Ralstons’ takings claim is ripe only if they submit—and the County formally denies—a Coastal Development Permit application.

The questions presented are:

1. Is a takings claim ripe when the government establishes a mandatory process requiring property owners to ask whether any development on their land is possible, and responds with a definitive and unappealable denial?

2. Are takings complaints subject to a higher pleading standard than other civil rights complaints?

Stay tuned.

Petition for Writ of Certiorari, Ralston v. County of San Mateo, No. ____ (U.S. June 16, 2023)

CA1: Despite Two Variance Denials, Takings Case Not Ripe Because It Isn't Futile To Try Again

Here's the latest from the U.S. Court of Appeals for the First Circuit on takings ripeness, Haney v. Town of Mashpee, No. 22-1446 (June 6, 2023). 

The case centers on Gooseberry Island, Massachusetts, which is zoned by the Town of Mashpee as R-3. But under the Town's zoning code, any residence must have at least 150 feet of frontage and a paved access roadway within 150 feet.

Which is problematic because Gooseberry Island is, well, an island -- separated from the mainland by a 40 to 80 foot channel depending on the tides. There's no bridge, although you can wade across the channel at low tide. No bridge means no roads, and no roads means no residential development.

So the owner sought variances from the frontage and roadway requirements in 2013. Denied. The road and frontage requirements are about emergency access. Next, the owner sought approvals to build a bridge. If emergency vehicles can get to the island, then maybe we can build roads, and home. The owner proposed a wood bridge, which was opposed by the Mashpee Wampanoag Tribe, which holds a shellfish grant from the Town in the adjacent water. The Tribe claimed a bridge would adversely impact the shellfish habitat. Consequently, the bridge proposal was rejected the Town under state and municipal environmental law.

The owner sought review by the Massachusetts Department of Environmental Protection. Also denied, because 17 square feet of salt marsh would be destroyed by the bridge piles, and because the bridge itself would cast shade on shellfish. The owner appealed up the state's administrative chain, and in the interim revised its proposal to make it a steel bridge, which would not require pilings and would not cast as much shade.

That change seemed at first to have the desired effect, because the DEP told the owner that a steel bridge was entitled to approval under state environmental law. In light of that, the state appeal office -- which was considering the administrative appeal -- stated that the appeal should be granted. But the Town opposed the change, asserting that the switch from wood to steel was not authorized in accordance with the change rules. When the state appeal office issued its final decision, it was not good news for the owner: steel bridge denied, because the change didn't conform to the requirement that any plan changes are not substantially different than the original proposal.

The office of appeals concluded that if the owner wanted the state to review a bridge proposal, it would have to resubmit a new steel bridge proposal. The owner appealed to the state court of appeals, which only recently affirmed. Haney v. Dep't of Env't Prot., 173 N.E.3d 55 (Mass. App. Ct. 2021).

Undaunted, the owner set the wheels in motion again. It applied to the Town for another variance from the frontage and road requirement. "In an effort to address the perceived reason behind the Board's denial of the 2013 Variance Applications [emergency vehicle access], the Trust provided the Board with a '2014 plan depict[ing] a bridge and Gooseberry Island." Slip op. at 7.

Unanimously denied, because "the bridge needs to be approved prior to building on the lot." Slip op. at 7. At that time, the state's decision on a bridge was still in-process It would not be resolved by the court of appeals until a few years later). The owner suggested that a conditional variance would be ok: how about approving the variance, conditioned on the state's later approval of a bridge? Nope, variance denied.

Federal court takings lawsuit followed. As did the government's 12(b)(6) motion to dismiss, which the district court granted. The takings claim was not ripe "because the Trust never applied to build a steel bridge." Slip op. at 9. The owner could have (and thus should have) "followed through with the filing of a New Notice of Intent with the [state] for construction of a steel bridge, even though[it] 'expressed support for this proposal.'" Slip op. at 10. The state might just grant that application, and "pursing the steel-bridge proposal would not be futile." Id.

The First Circuit affirmed because there hasn't been a final no. Those two variance denials? Not enough. The court rejected the owner's argument that it couldn't get approval from the state for a bridge without already having a variance from the Town already in hand. According to the opinion, the owner didn't need a variance from the Town in order to apply for permission to build a bridge from the state, so that issue was irrelevant. Slip op. at 13. 

The court also rejected the owner's assertion that the Town strayed outside its jurisdiction when it considered whether to condition a variance on a bridge. The Town can issue permits with conditions generally, and here, "the Board never determined whether that permit should or should not issue." Slip op. at 14. 

And what about the owner's main argument, that the Town actually denied the two requests for a variance? The Town didn't exactly condition a variance on the owner building a bridge, it's only that some of the Town Board members mentioned it. Or so argued the owner. The Town's actual decisions, according to the owner, were clear denials. Not quite, the court concluded. And here's where it seems to get a bit ack-basswards. The court concluded the Board member's statements "constitute the reasons for its decision." Slip op. at 15.

We thus see no support for the contention that we must disregard the statements made by the Board members as recorded in the 2018 Variance Decisions, at least when such statements are plausibly related to the concluding explanation given by the Board for denying the variances.

Slip op. at 16. The court concluded that the owner's argument was "underdeveloped" and thus waived.But is ripeness concerned with the why of the denial, or just that you get a denial? What's the deal with the reasons?

The court next noted that "Haney offers no argument as to why the denial of the 2018 Variance Applications should be interpreted as with prejudice." Slip op. at 15. The written denial "fails to specify whether the denials were with or without prejudice[.]" Wait, what? What's this prejudice thing? The Supreme Court only requires a decision, not an unequivocal no and an expression that the government won't consider you again, property owner. And remember that Pakdel only requires "de facto" finality, not more.

Finally, the First Circuit rejected the owner's argument that to chase more would be futile:

This futility exception -- which has been part of our caselaw for three decades -- was recently endorsed by the Supreme Court in Pakdel. 141 S. Ct. at 2230. In addressing the state-forum finality requirement, the Court held that a landowner only needs to show "that there is no question about how the regulations at issue apply to the particular land in question." Id. (cleaned up). The finality requirement is therefore met once it is clear to the federal courts that the initial decisionmaker has reached a "definitive position on the issue." Id. at 2230 (quoting Williamson Cnty. Reg'l Plan. Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172, 193 (1985)).

Through Pakdel, our caselaw's futility exception is now simply part and parcel of the finality requirement.

Slip op. at 17-18. Here, the Town "Board has never represented that it would deny any and all variance applications -- even if the [owner] presented applications accompanied by an approved steel-bridge plan." Slip op. at 19.

So go get a steel bridge approved, property owner. And with that, come back to the Town and submit a third application for a variance. Who knows, maybe the Town just might grant that one.  

Haney v. Town of Mashpee, No. 22-1446 (1st Cir. June 6, 2023)

New Takings Cert Petition (Ours): Can Govt Thwart Federal Court Regulatory Takings Claims By Seeking Abstention In Favor Of State Courts?

Here's the latest in a case we've been following since before it became one of ours.

In Gearing v. City of Half Moon Bay, No. 21-16688 (Dec. 8, 2022), the Ninth Circuit upheld the district court's dismissal of a regulatory takings case, holding that federal courts should abstain from considering regulatory takings cases in favor of pending state court eminent domain actions, even when the condemnor instituted the state court action after the federal takings lawsuit was filed.

In the time since the Ninth Circuit issued the opinion, our law firm has joined up with our colleague Kristen Renfro who represented the owner in the court of appeals. That's why we won't be commenting further, and instead suggest you read the cert petition we filed today, chiefly authored by Counsel of Record Deborah LaFetra (lately of the Tyler v. Hennepin County takings case). 

Here is the Question Presented:

Thomas and Daniel Gearing are categorically prohibited from building on residentially zoned vacant land that the City of Half Moon Bay prefers as an open space public park. They exercised their choice of forum by filing a lawsuit in federal court under 42 U.S.C. § 1983, alleging a regulatory taking in violation of the Fifth Amendment, and seeking just compensation, costs, and attorneys’ fees. The City responded by filing an eminent domain lawsuit in state court that significantly limits the issues and the Gearings’ remedies. The City then convinced the federal court to abstain from deciding the Gearings’ first-filed federal lawsuit under Railroad Commission of Texas v. Pullman Co., 312 U.S. 496 (1941). As a result of the forthcoming state court decision to which federal courts are bound to give full faith and credit, 28 U.S.C. § 1738, the Gearings will be deprived of full just compensation as well as other recovery authorized by the Civil Rights Act.

The question presented is:

Whether federal courts may deprive takings claimants of their chosen forum by invoking the prudential Pullman abstention doctrine to require them to first litigate their claims in state court.

Stay tuned, as always.

Petition for Writ of Certiorari, Gearing v. City of Half Moon Bay, No. ___ (June 1, 2023)

New (Michael Berger) Cert Petition: Knick "Changed the world of takings litigation" And Applies Retroactively - And Statutes Of Limitations Are Affirmative Defenses

Here's a new cert petition, filed this week by Michael Berger that asks whether Knick's no-need-to-exhaust-or-chase-state-compensation rule applies retroactively.

The Second Circuit held that no, the owner's claims were too late, and although Knick overruled the Williamson County rule that kept him from a timely filing in federal court, that's just too bad:

We also agree with the district court that the remaining claims are largely time barred. Demarest filed this lawsuit in June 2021, yet much of the conduct targeted by his complaint dates from long before. Since a § 1983 claim adopts the limitations period for a state personal injury tort-which in Vermont is three years, see Morse v. Univ. of Vt., 973 F.2d 122, 125-27 (2d Cir. 1992)-claims accruing before June 2018, which comprise the majority of Demarest's complaint, would be time barred. Although Demarest argues that his claims accrued only when a recent Supreme Court decision, Knick v. Twp. of Scott, Pennsylvania, 139 S.Ct. 2162 (2019), removed an impediment to his pursuing them, he is incorrect: "[a] decision recognizing a cause of action after the period has run does not retroactively interrupt the running of the limitations period." Fiesel v. Bd. of Educ. of N.Y.C., 675 F.2d 522, 524 (2d Cir. 1982) (internal quotation marks omitted).

Arguing that Knick rewrote the script (and righted the ship that Williamson County had upended), the petition asks the Court to give retroactive effect to its rule.

To us, this makes a lot of sense because Knick wasn't so much a new rule as a return to normalcy. Williamson County was the aberration and the Court veering takings litigation and procedures off-track. Before Williamson County, a property owner could go to federal court with her federal takings claim, and she can now. It seems like this is just what retroactivity was meant for.

The petition also points out that the Second Circuit treated the statute of limitations as some kind of jurisdictional bar, and not a claims processing rule (hang on, that sounds familiar....).

Here are the Questions Presented:

The Court of Appeals refused to give retroactive effect to this Court’s landmark decision in Knick v. Township of Scott, 139 S.Ct. 2162 (2019), which opened the federal courts to constitutional property litigation for the first time in 34 years. Compounding that error, the Court of Appeals refused to grant rehearing to consider the impact of the then pending decision in Wilkins v. United States, 143 S.Ct. 870 (2023), which ended up restricting the impact of statutes of limitation. In combination, the Court of Appeals’ refusal to apply this Court’s current law deprived Petitioner of property without just compensation and due process of law.

The questions presented are:

1. When Knick changed the world of takings litigation by allowing—for the first time since 1985—a property owner with a claim for unconstitutional taking of property to file suit in federal court, must that decision be applied retroactively, with the time to file suit tolled until the date Knick was decided, so as to give its benefit to property owners who had been precluded from suing in federal court before?

2. When Wilkins confirmed in the real property context that statutes of limitation are not jurisdictional but are merely claim processing tools, must lower courts now treat statutes of limitation as affirmative defenses to be proved at trial by the defendant?

Are we going to follow along? You bet we are (and you should also).

Petition for a Writ of Certiorari, Demarest v. Town of Underhill, No. ____ (U.S. May 8, 2023)

CA6: Taking Occurs, And Statute Of Limitations Begins To Run, When Foreclosure Redemption Period Expires And Not Before

In what the court termed a "matter of first impression," slip op. at 5, the U.S. Court of Appeals for the Sixth Circuit held in Beaver Street Investments, LLC v. Summit County, No. 22-3600 (Apr. 21, 2023), that the statute of limitations in a § 1983 takings claim for a local government's alleged home equity theft (for more on that issue, see here) began to run when the period when a homeowner can redeem a foreclosure ended, and not when (as the government argued) the government made the decision to acquire the home (the final adjudication of foreclosure).

As the majority noted:

The dispositive issue in this appeal is what constituted the “act of taking.” See id. In other words, the Court must determine when, as a matter of law, the County took BSI’s property without paying for it. See id. The County argues that the taking occurred when it made a final decision regarding BSI’s property, which it asserts was the final adjudication of foreclosure. BSI argues, by contrast, that the County took its property on the date the County transferred the property to the land bank. This appears to be a matter of first impression.

Slip op. at 5.

We suggest you read the opinion because (1) it isn't that long (11 pages, including the dissenting opinion), and (2) as all takings statute of limitations opinions do, it also backhandedly deals with the flip-side issue of when a takings case is ripe. As the majority noted, the SOL only begins once a case is ripe, and both dates are based on when the taking occurs. The court rejected the government's argument than an earlier decision controlled. The majority concluded that the case involved ripeness, but "is still relevant, however, because it provides the general principle that for a taking to occur, 'there must be a 'final decision' to take the property, ... meaning that it is 'known to a reasonable degree of certainty' what will happen to the property ...." Slip op. at 6.

The end of the redemption period -- the window in which the property owner could effectively pull out of the dive and get the property back -- was the first point in time where the taking could have occurred. If the owner paid up, "the County would have been prohibited from taking the property." Slip op. at 7. This was also the first time that it became clear that the County would seize it. Yes, it decided to take the property earlier when it entered a final decision of foreclosure, but no actual acquisition was possible until the owner let the redemption period lapse. See id. ("until that time, whether the County would transfer title was unclear").

One judge dissented, and would have agreed with the County that deciding to take the property by foreclosing was the operative event. The complaint was complaining about the transfer, not the lapse of the redemption period, the dissent argued. See Dissent at 10. That's when the property owner knew it was injured:

Here, the injury forming the basis of BSI’s action was the County’s decision to direct the transfer of BSI’s property to the County’s land bank. Thus, the key event alerting BSI to protect its rights was the BOR’s final adjudication of foreclosure on June 3, 2019, which ordered that direct transfer. At that time, BSI knew or had reason to know that the County would transfer its property in lieu of sale.

Id.

To the dissent, that decision was also the "final decision" for ripeness purposes. Which is the same date the statute of limitations clock began ticking. When the taking took place is a separate inquiry (at least according to the dissenting judge).

What do you think about this one? What accounts for the different world views of the majority and dissent? Is the majority viewing this as more akin to a physical taking, where compensation is owed when the property is transferred from the owner to the County? And is the dissent seeing this as a regulatory taking where it is the "final decision" to take without compensation that renders the claim for compensation ripe?

We know which way we see it - what about you?

Beaver Street Investments, LLC v. Summit County, No. 22-3600 (6th Cir. Apr. 21, 2023)